January 2015 | Christabelle Noronha
'We are investing in the technologies of tomorrow'
Tata Chemicals North America (TCNA) is one of the world’s leading suppliers of soda ash to a broad range of manufacturing industries. The company’s Green River, Wyoming operation is one of the largest soda ash facilities in North America, with an underground trona mine and a surface refining plant to process the trona ore into soda ash. Martin Keighley, managing director of TCNA, is a Brunner Mond veteran who took charge in mid-2013.
A graduate in chemical engineering from Cambridge University, Mr Keighley is based in New Jersey, where he lives with his wife Sally and three children. He speaks to Christabelle Noronha about TCNA, the Wyoming operation and what’s in store for a business with a future that promises even more than the riches of the present.
What has made the Green River operation one of Tata Chemicals’ most successful acquisitions?
In Green River we sit on top of, and have direct access to, a wonderful quality of natural resource, which is the trona we use to produce soda ash. This raw material represents more than 90 percent of the known amount of the resource in the world, and it gives us a special and unique opportunity. We are not dependent on any upstream raw material and we are free of the vagaries of primary input costs.
To add to that, we have a fantastic energy equation thanks to low-cost, high-quality and low-emission coal, which comes from 50 miles down the road. And we have access to natural gas at one-third the price you have to pay for it in Europe and elsewhere. All of this, along with our committed and experienced team, makes Wyoming a winning formula.
Could you tell us about the markets that TCNA ships its soda ash to?
About 45 percent of our soda ash is sold in the United States and the rest is exported. We are able to export to high-growth markets, to Latin America, the Middle East, southeast Asia and Australia. We have also started shipping our product to India, which is another high-growth market. We are an American enterprise with a global business, a world-beating cost base and an outstanding product.
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No. We have done a lot of work over the last year or so to figure out the direction that our global soda ash business needs to take, and we are working with Tata Chemicals’ other operations to supplement the company’s growth in those markets. We have made some difficult decisions with our operations in the United Kingdom and Kenya and we are now certain that Green River will be the centre of our growth and expansion in soda ash.
The name change, from General Chemical Industrial Products to TCNA happened in 2011. What has the transition been like?
We decided on the new identity as a means to drive the brand. We are in a global business and the equity and value that the Tata brand name brings is crucial in the markets that we serve. The organisation had been through a lot of change and had faced some difficult times. The name change provided the teams in New Jersey and in Wyoming with a strong strategic sense of the business.
We have a resource that will last 100 years and more; not many companies can say that. Soda ash will continue to be used across the world because glass will continue to be made, detergents will continue to be manufactured and then there are the byproducts, such as sodium bicarbonate. Rather than thinking from year to year we can actually think for the next 20 years, 50 years, 100 years. A vision like this comes naturally to Tata companies, who see themselves as long-term custodians of businesses. That was another reason for adopting the Tata name.
As I describe it to the guys out in Wyoming, we have a little gold mine and it’s ours to make the most of this resource, to develop a business that delivers value today and in the future. What we are talking about is generational ownership of a business where people and their families are involved. It’s a community-oriented enterprise and creating a link between it and the Tata brand name has been very important.
Have the people in Wyoming and your customers welcomed the change in brand name?
I am certain they have. We have been a little bit resistant, I think, to talk about this too much in the past. What we have been doing is working to generate greater publicity for the business and the benefits we provide for the community and for our customers. It’s vital to talk about these things because we are a key player in Wyoming and the state is a solid supporter of our business.
The community and the state, including the governor, senators and congresswoman, all see a huge advantage in having a strong and stable owner like Tata. I have been impressed by the degree of acceptance and the excitement, particularly when we talk about the long-term future of the business.
TCNA signed an agreement on its energy source recently. What is the significance of this agreement?
Our agreement with Westmoreland is important because coal is a critical raw material for us, and we have just signed a deal to secure, over the next 12 years, the supply of high-quality, low-sulphur coal. Coal gives us a significant cost advantage and it is good for us to have coal that is mined in Wyoming. This makes for a fantastic partnership in terms of the economic prosperity we bring to the state.
Tata Chemicals’ soda ash operations in Europe and Africa have taken a hit. How is the company coping with these setbacks?
The Kenyan operation has its challenges with the impurities in the trona in Magadi. We are committed to trying to figure out a way to remove those impurities, but at the moment we don’t have the right solution. In the United Kingdom, one of the reasons we had to shut down the plant in Winnington was the high cost of energy and related regulatory pieces. We don’t have any such issues with Wyoming and its natural soda ash. The natural process that we and our competitors in Green River run is a fundamentally low-cost operation. We have a superb supply chain with our rail network, which takes our product to the coast and the shipping network, from where it goes to our distant export markets. We can take the product from Green River to anywhere in the world cost-competitively, whereas the synthetic soda ash producers — in Europe and India and China — are bound to the regions where they produce the alkali.
What about the synergies between these three operations?
We have been doing some work over the last year to reconsider the opportunities we have to work more closely together. Ultimately, all of us produce quality soda ash. The processes may be different but plenty of the unit operations are the same. We are learning from projects we do around the world and we have started to move more people around. We had a conference earlier this year in London with all of our key executive teams. We identified and mapped out a number of global projects that we think will benefit from greater cross-fertilisation and the coming together of our best brains. We now have a number of global delivery teams and they are going to be working on these projects. One of these teams will focus on power and reach outside the Tata Chemicals group to companies such as Tata Power and Tata Consulting Engineers. This is an interesting opportunity for us.
Could you tell us what TCNA is doing in the sustainability sphere?
We start from the basis that we are custodians of an outstanding natural resource and, therefore, it is beholden on us to look after and manage this resource in the best possible way. This is consistent with the Tata group’s sustainability ethos. We are constantly thinking about how we can minimise the load on the environment of our business, and we are working with some of the other soda ash producers in Wyoming on this. In the context of the community, most of TCNA’s employees live and work out of Green River and Rock Springs, which are the two big population centres of Wyoming. A fair amount of our employees are natives of these cities and the ‘western’ lifestyle is hugely important to them. We are going to invest more in the development of our people, something we have been a bit short on previously. On giving back to the community, we have an excellent ‘care campaign’ that we run every year with United Way, a charitable foundation. Our employees support the campaign with their contributions. We have raised more than $100,000 in 2014 from our employees for it and TCNA will match that dollar for dollar with its own contribution, so we actually will be donating $200,000 to $250,000 to United Way and this will go into the local community initiatives.
What about TCNA’s future plans and aspirations?
While we are encouraged and excited about our long-term vision and future, we have to deliver on short-term performance; there is no getting away from that. We have to start thinking about how we can strengthen and develop our team and our resources, especially so given the changing demographics of our workforce. We have a highly experienced workforce, many of whom will be retiring in the coming years, which means we will have to bring in fresh talent. We need better bench strength, so to speak, to take the business forward. We will be driving a lot of relative improvements by adopting new standards in manufacturing and operational excellence. Bringing in new people with expertise in these areas will surely benefit our business.
At the same time, we are starting to invest in the technologies of tomorrow. We don’t want to play catch up with the competition; what we want to do is leapfrog the competition and be the one everyone else is chasing. We are not there today but I believe we can be. Our customers tend to use our product in the same way that they have always used it. Should we accept that that is how it’s always going to be, or should we look at other ways of doing things? Maybe there are new ways our customers can use our product. Maybe we can innovate with our supply chain, our processes and our technologies. We are challenging ourselves to think differently and, I believe, there is an opportunity to grow value through that.
We will be engaging with our customers in innovation dialogues, we will be engaging with research institutions to think about how we can improve our processes and activities. These initiatives will give us better-quality products, deliver an improved cost base and allow us to grow our business in ways that are more sustainable.
What is the Tata brand’s standing in the United States?
We all probably recognise that the knowledge about and acceptance of the Tata brand in the United States is still relatively low. But within our community in Wyoming it certainly is getting much better. The brand has developed a strong identity and people understand that it stands for integrity and strategic ownership. Tata Chemicals has invested nearly $50 million in its North America business in the 18 months I’ve been here. People see real value and commitment coming from the Tatas.
That said, I think we would be kidding ourselves if we say that Tata is a household name across the country. But recognition will come; we have to take it step by step. I think the best way to build brand recognition is by building on success. If Tata companies can continue making a success of its businesses in America, adding value both at the state and national levels, then people will start to take notice, and significantly so.
Fact file: Tata Chemicals