Oil & Mining review
For Oil & Mining, 2012 proved to be a challenging year due to the slowing in global demand. However, the segment improved its profitability to 11.6% compared to 2011 (10.8% operative EBIT in 2011) and appears well positioned to capture the next wave of growth. The segment continued to refine and sharpen its strategy in line with the Kemira Group strategy, with a dual focus on two distinct growth opportunities: its customer industries themselves, and water usage within those industries.
A lean, efficient organization
As Oil & Mining’s profitability has maintained a stable level, the benefit brought to the segment by Kemira’s Fit for Growth program is primarily a lean and agile global platform. Oil & Mining’s refined organization can be seen as simplified, entrepreneurial and empowered, allowing the segment the speed and flexibility to focus on its strategy of profitable growth.
The segment’s strategic focus continues to revolve around applications for unconventional oil resources and declining ore grades, connecting customers with the latest innovations to meet their challenges. The opening of Kemira’s R&D projects laboratory in Alberta, Canada in May demonstrates Kemira's commitment to help it´s customers address challenges in reusing and managing water in applications such as oil sands. In addition, the new site supports the company’s regional growth in the unconventional oil and gas marketplace.
Oil & Mining’s distinct strengths in global competition are, of course, its water expertise, combined with its emphasis on tailoring solutions and products to customers’ unique processes. Particular markets of note for the segment in 2012 were the Middle East, Africa and South America.
Another of the Oil & Mining segment’s distinct achievements in 2012 was its increasing recognition as a more technically adept player by the segment’s customer industries. The technical leadership in the segment has made significant contributions in terms of patents, research and technical papers; including 10 patent filings, over 40 technical papers and more than 20 case studies showcasing commercial success.
For example in shale gas production, KemFlow A-4251 Friction Reducer and AMA-324 biocide provide improved friction reduction performance, reduced pumping cost, lower production dose and cost savings. Reduced dosage on KemFlow friction reducer coupled with the improved environmental profile offers customers also a smaller environmental footprint.
Another contributing factor is the number of case studies conducted in partnership with customers, strengthening Kemira's reputation for successful applications that tackle customers’ needs head on. Together, these clearly demonstrate the segment’s dedication to its customers and speak to the quality of the solutions Oil & Mining brings to the marketplace.
In the short-term future, Oil & Mining is looking to restore growth as China and other global economies begin to recover. In the longer term, the segment also seeks to continue to capture growth in emerging markets, particularly in the Middle East, Africa and South America.
In terms of Oil & Mining, Kemira aims to become a recognized leader in water chemistry. Two important milestones in the execution of this long-term strategy have already been achieved. Kemira signed a licensing agreement with geographical exclusivity with Mitsui Chemicals, Inc. for acrylamide manufacturing technology. Also a two-year capacity expansion for three sites in North America was completed, which has increased the manufacturing capacity by 60%. These actions strengthen Kemira’s polymer product line globally. Polymers are core to Kemira’s water technology platform and also play a significant role in growing oil and mining applications like water reuse, wastewater treatment, rheology control and shale fracturing.