May. 13, 2013

Responsibility And Credibility

Checking In with Fecc President Edgar E. Nordmann on the Future Business of Chemical Distribution

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  • Edgar E. Nordmann, president, Fecc

Everybody in the Chemical Distribution industry knows his face: Edgar E. Nordmann, president of the European Association of Chemical Distributors (Fecc). Nordmann, a trusted opinion leader with sound business knowledge and refined cultural skills, fights tirelessly for the interests of his industry and its stakeholders without ignoring their social responsibility. A driving force behind the Fecc European Responsible Care (RC) Programme and a convinced supporter of the use of third-party verification systems for the RC programs, Nordmann is also a strong supporter of the European chemicals legislation, REACH. The honorary consul general of Malaysia in Germany for almost three decades is also an expert in European-Asian economic relationships. Michael Reubold spoke with Edgar E. Nordmann in the run-up of the Fecc Annual Congress 2013 in Hamburg and asked him about his opinions on all these topics and his view of the future of chemical distribution.

Distribution & Logistics: Mr. Nordmann, almost three years into your mandate as president of Fecc, would you draw a preliminary balance of the goals you had and the results you achieved?

Edgar E. Nordmann: The last three years have been very exiting for Fecc. Not only did we totally restructure our office in Brussels under the newly elected board and with Dr. Uta Jensen-Korte as the new director general at the helm, but we also became much more efficient. Fostering our relationship with Cefic management and the relevant EU institutions has also been priority. We were represented on a high level in all, for us, important decisions concerning our industry.
We developed our vision and our mission statement as our guidance for our work until 2014. We can truly say that we are a highly recognized and visible association by all our relevant partners.

In October 2009, Fecc and Cefic launched the Fecc European Responsible Care program for chemical distributors, which you have since been actively promoting. What progress has the initiative made?

Edgar E. Nordmann: As it is widely known, I strongly believe that the joint European Responsible Care Programme is now stronger. But with a number of national programs in some EU countries, which have existed for quite some time, it is not so easy to establish the very well-balanced European program. At Fecc, we are concentrating on those countries that either do not have any program in place or where there is no industry association. Our work is mainly to assist individual companies or distribution associations that wish to implement the Fecc European Responsible Care Programme. In 2011 and 2012 we received over 15 applications to the program, coming mainly from subsidiaries of our members located in Eastern European countries. The Spanish and Portuguese distributors associations have also based their RC program on the Fecc's.
An important aspect of this program - and a personal concern of yours - has been that companies applying for the program undergo independent third-party assessment in order to verify the compliance against Responsible Care requirements.
Edgar E. Nordmann: It is well noted in the distribution industry that I favor an agreement with third-party verification systems - TPV. I consider it my main duty to convince and encourage associations and companies to use TPV because it gives our industry improved credibility with our numerous stakeholders, including European institutions and local government authorities. Without TPV it is my strong belief we will face even more regulations at EU as well as from local governments. My endeavors to promote TPV are still intact, and as long as I am part of this industry, I will continue to fight for it.
Responsible Care/Responsible Distribution - RC/RD - in partnership with TPV systems has been truly successful in the Americas. In Brazil for example, the RC/RD program with TPV has just been chosen and recommended by the government as the master plan to be followed by other industries. In the United States, Canada and Brazil, it is a requirement for membership in the relevant associations and in many cases necessary to obtain access to a large number of producers.
On another note, it is definitely better to be proactive than wait for further EU and government legislation. In essence you will see me acting as a convinced supporter of the use of TPV for the RC programs.

REACH has been and still is one of the most important legislative actions for the chemical industry and its stakeholders in the EU. What do you think of the status quo and the recent review of REACH by the European Commission?

Edgar E. Nordmann: I am also a strong supporter of REACH. The first phase of introduction has been successfully implemented - albeit at very high costs - and we, as Fecc, are now actively involved in the second phase of implementation. However, I believe that together with all stakeholders, we need to find solutions to reduce the enormously high financial burden on our companies. The chemical distribution industry in its majority comprises SMEs - small and medium-sized enterprises - and you can really not say that REACH is particularly SME-friendly, for both manufacturers and distributors. It may be interesting to note that SMEs were and are the main focus of all European countries and the EU Commission for economic development in the region.

In a globalized world, do you think that national or regional legislations such as REACH will hinder competition?

Edgar E. Nordmann: Maybe in the short term, but in the medium and long term it's definitely an advantage. Whereby I, like with RC/RD, have a preference for regional agreements. We now see an accelerated process in the United States and China, who are working on the development or revision of their chemicals legislation. In this sense it is definitely an advantage for European companies, as we have now years of experience meeting the requirements that these types of legislations entail.

What do you see as the most critical future challenges for chemical distributors and what will be success factors for chemical distributors to cope with these challenges?

Edgar E. Nordmann: The success factors for chemical distributors will be, as we have seen in the past years, an ever-increasing demand for productivity and efficacy, diversification in the product range and a large customer base, but it certainly does not end there.

Can chemical distributors secure future business success by focusing on specialty chemicals, niche markets or value added services?

Edgar E. Nordmann: As through the national associations Fecc represents the industry's SMEs, I consider we have to be specialized in a number of different industry segments, while being able to take away from customers and suppliers what they deem not to be in their main focus - without setting aside specialty chemicals, niche markets and value added services.

If there would be one role model of a chemical distribution company that guarantees business success in the future, what could it look like? Do chemical distributors have to better adopt megatrends important to their principals and customers, and do they have to implement corporate social responsibility strategies?

Edgar E. Nordmann: A successful business model also includes the so-called megatrends: corporate social responsibility, corporate governance and risk management policies - and last but not least sustainability. Although business success can never be guaranteed, we can't forget there are too many factors that we hardly have a chance to influence as individual businesses. The more important it becomes to have strong European and local associations, like Fecc.
I find the Global Compact a good example and guidance for the future, a platform of the United Nations that convenes companies together with UN agencies to encourage businesses worldwide to adopt sustainable and socially responsible policies and to report on their implementation. Their goals, based on 10 principles and action plan give you an interesting insight on how the future of business could look.

You are honorary consul general of Malaysia in Germany and an expert in European-Asian economic relationships. What can European leaders learn from the Malaysian success story?

Edgar E. Nordmann: Having been the honorary consul general for the last 29 years, I have witnessed Malaysia's very positive and fast transformation, going from a developing to an advanced developed country, with a sound base and strong financial grounds. I believe Malaysia will most probably be an industrialized country by 2020.
The main drivers of success have been the political stability, sound economic policies, careful transformation - from an agriculture-dominated to an industrial country - based on their local products and the high degree of acceptance of new technologies and their further development. A satisfactory and accepted tax system, balanced budgets and high level of education both basic and advanced, have also been key elements for the advancement of the country.

What do European chemical distributors have to pay attention to when setting up businesses in Asia or establishing business relations with Asian companies?

Edgar E. Nordmann: Asia is as diversified as Europe is from Norway to Sicily, from north to south and east to west. The best advice is certainly to enter Asia but act locally. We will probably see five big economic - and partly political - players: South Asia (Pakistan, India, Bangladesh and Sri Lanka), Southeast Asia - and here the ASEAN countries with over 400 million people - China, Japan and Korea.


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