Foreseeing what 2022 would look like, we predicted a slowdown from the middle of the year, as the global economy was overheated, which is part of the business cycle, though in this case disrupted by COVID-19. In contrast, Russia’s aggression on Ukraine led to the intensity of factors such as a drop in demand due to the soaring energy prices and high cost involving the production of raw materials, which would have happened anyway.
There has been and is now great unpredictability when considering short- and medium-term planning. Prior to 2022, we had not experienced such spikes in gas prices or had to make such dramatic decisions in a very short period of time based only on signals from various branches of the market environment. Also, for the first time in history, we were cut off from the supply of propylene from Ukraine overnight. This was the first and most challenging problem of last year. Within a month, we constructed an alternative system for securing the Oxoplast Business Unit in basic raw material and implemented a mechanism for short-term planning and operation that is flexible and adapted to the conditions we face.
The current turbulent nature of the business environment is significant, and as a result, stability in functioning, maintaining production and jobs takes tremendous effort. This is our shared responsibility, both at the level of the individual, the company and Grupa Azoty.
What is the reason behind the decision to expand business on the U.S. market?
A strategic aspect of Segment Oxoplast’s business concept is regional diversification. Within the U.S. market, there is a reliance on human relations among those operating in the business. Given this factor, a decision was made several years ago to start local representation on the US market. At first, we shipped products from Poland in iso-containers in smaller quantities, which went directly to customers. In order to tighten the established cooperation and handle larger volumes, the next step was to start local activities. Hence, two years ago, the decision was made to rent a 2-Ethylhexanol storage tank on the east coast of the US and test the mechanism of operation. A formal route had to be taken based on the laws there at various levels and regulatory requirements, which required extensive effort and openness from our company’s services.
Last year, we decided to expand this activity and rented a second storage tank. Today we have a total storage capacity of 2,500 tons for 2-EH alcohol and 1,500 tons for Oxoviflex b plasticizer. Ultimately, we would like to deploy several thousand tons of both products annually in the US market.
How are we planning to develop the Segment’s business on the U.S. market?
Lately we have attended several important conferences and exhibitions, which is essential to function on the market, be visible and establish connections. It’s also a kind of declaration of being serious about long-term business on a given market.
Without a doubt, we are operating in a difficult time, and being able to allocate volumes across logistics centers in different parts of the world is crucial to keep production and business management flowing. While the operations we are undertaking are ambitious, given the opportunities offered by the U.S. market, there is clearly much to strive for.
Thank you for the interview.
Source: oxoplast.com
