This past year was important for IVL on many fronts, and I am pleased to report that we took a number of decisive steps to further strengthen our position in the market while continuing to demonstrate how we are putting our sustainability strategy into practice.
We embrace sustainability because it s a journey, transformation, and demands that we continually improve in our operations, our team, and for our long term success. Our collective efforts will contribute to a successful decade of action on Sustainability.
A leader in recycling
We announced last year at the United Nations “SEA Solutions 2019” partnership week that we are accelerating our efforts to increase our recycled PET volumes to 750,000 tons while also pledging USD 1.5 billion towards achieving this target by 2025 as part of the Ellen MacArthur Foundation and UN Environment Program’s New Plastics Economy Global Commitment which aims to reduce levels of marine plastic waste in Southeast Asia.
Focused on innovation
Two key acquisitions were made which reinforce our priorities towards innovation. The first, acquiring Huntsman’s world-class integrated oxides and derivatives business is a transformational opportunity that reinforces IVL’s integrated oxides and derivatives business while broadening our expertise through operational excellence, global scale, product portfolio, customer and supplier base, innovative formulations and technologies. This is IVL’s largest acquisition and one of the biggest by a Thai company in the last decade. The second was our acquisition of California-based Green Fiber International, which produces rPET flakes. This extends IVL’s recycled flake supply chain to the US west coast, ensuring that PET bottles are recycled and put to additional use, further supporting the circular economy. It also contributes to our long-term sustainability objectives and our corporate plan to invest significantly in recycling over the next five years.
Communicating our message
As we continue to grow, we are also improving our presence on the global stage participating in numerous events and conferences, demonstrating how we are contributing to climate resilience. I had the pleasure last year to join a high-level climate change panel hosted by Saint-Gobain at the FORTUNE Global Forum in Paris. It was an important opportunity to discuss the important steps IVL is taking, and how we can all do more to reduce our carbon footprint helping meet national climate change commitments. IVL also participated in the World Economic Forum, the Goldman Sachs Conference in Paris, the AEC Business Forum 2020, and the CEO Forum held by Thailand’s Ministry of Foreign Affairs.
Investing in a better future
As part of our effort to streamline our operations and ensure that we maintain a sharp focus on our priorities company-wide, we set out five major strategic priorities to better steer our business through the current cycle and beyond. The five priorities, developed within the framework of our vision, values, sustainability, financial aspirations, differentiators and metrics, are the following:
The launch of Olympus, our company-wide cost and cash transformation program to support our performance in this low-spread environment and which will position us for the next wave of growth.
Driving the full commercial potential in each of our assets to growth both our volumes and our margins.
Exploring selective adjacency opportunities to our existing businesses, to incubate our future engines of growth.
Doubling down on recycling, to be a leader in PET recycling and setting a new bar for sustainability in the industry.
Acknowledging that all of this will only be possible if we are able to invest in and develop the best leadership team in the industry.
A stronger leadership team
Our Sustainability and Risk Management Committee was strengthened with the addition of three new members, one of whom is an independent director, ensuring we maintain a continued in-depth, diverse and focused approach to accomplishing our sustainability mission. More broadly, also in the last year, we announced the appointment of two new members to our senior leadership team, our Chief Strategy Officer and Chief Human Resources Officer, to provide an improved focus in our operational approach and ensuring we have the best personnel going forward.
Reducing our carbon footprint
In our efforts to reduce our greenhouse gas (GHG) emissions, we are continuing to broadly achieve intensity reductions at 6% from 2013 levels for 2020 while further tracking emissions globally for selected criteria, and will align our operations and establish further targets going forward during the year.
It’s with extreme regret I must inform you that one of IVL’s contractors passed away after being electrocuted at one of our plants in Thailand. We responded by implementing a more detailed corrective and improved action plan to ensure that such a tragedy does not reoccur. Moreover, our facility in Spain, Indorama Ventures Quimica S.L.U. experienced a fire in its PTA/IPA finished product warehouse which was quickly brought under control. All employees were safe and the production lines were operating normally. I cannot underscore enough that the health, safety and well-being of our employees is paramount – and our core value as a company. We carried out a detailed investigation at both locations with the necessary remedial actions, and will continue to ensure that all of our employees are working in safe conditions while continuing to invest in occupational health and safety training.
A valuable benchmark for our sustainability performance comes from our external recognitions, and 2019 was an outstanding year reflecting the continued hard work and dedication of our employees worldwide. IVL was included in the DJSI Sustainability World Index for the first time (ranked second among the top global chemical companies), as well as the DJSI Emerging Markets Index for the third consecutive year. We were recognized as one of the Sustainability Leaders 2020, receiving the “Silver Class” distinction in the SAM Sustainability Yearbook, ranking among the top 10% of 108 global chemical companies assessed in 2019. We remain a constituent in the FTSE4Good Series with a higher score and remain at the top of the group with a 100% percentile rank. We achieved the leading score among companies in the Stock Exchange of Thailand and the Global Industry Classification Standard in Bloomberg’s ESG Disclosure Scores, attained the highest score for corporate transparency by a company in Thailand by Transparency International, with additional recognitions from Sustainalytics, Ecovadis, CDP and MSCI. In the US, we were awarded with the “Sustainability Award” by Coca-Cola at their annual Supplier Summit in Atlanta for our FuTuRePET Single Pellet Sustainability Solution, which was developed and commercialized to increase recycled content in accordance with sustainability goals while maintaining high package performance standards.
Pioneering green financing
We are also proud to have secured Thailand’s first-ever green loan, for USD 100 million and €100 million, from Japan’s Mizuho Bank. The loan was further increased to USD 200 million and €200 million, with a reduction in the cost of financing, based on further enhancements to our environment, social and governance (ESG) rating, and is a recognition of our leadership in sustainability.
Turning challenges into opportunities
While we develop our existing markets and enter new segments, we continue to look ahead with an eye to how we can further advance environmental, social and economic benefits for our stakeholders, and achieve our sustainability strategy. Our initiatives going forward will address the important megatrends underway as they have potentially outsized implications on our business operations. These include the climate crisis, security threats, the need to save ecosystems, product specific GHG emissions and increasing demands from stakeholders. We aim to address each of these trends to our advantage through our blueprint that focuses on the respective opportunities which can contribute to and improve our business over the long-term.
We are also in the preparatory stages to become a signatory to the UN Global Compact, the world’s largest corporate sustainability initiative based on CEO commitments covering ten principles that can be incorporated as part of a company’s strategy, culture and day-to-day operations.
Finally, we are all paying close attention to the coronavirus, or COVID-19, which is having major health and economic impacts. IVL is no exception, given our global operations including in mainland China. We have taken measures to ensure the safety of our workforce around the world and have increased safety protocols and standards. It goes without saying that we are particularly concerned about the health and well-being of all of our employees and their families, and the continuing impact that COVID-19 is having on the world.
Performance with a purpose
I am proud that we are achieving our sustainability goals through our transformative growth strategy. This is due to the hard work and dedication of our workforce around the world as we go from success to success despite ongoing trade tensions, coronavirus, and other uncertainties. We are rapidly becoming a leader in recycling and bringing continued innovations to PET materials and rPET. I remain confident that together, we will succeed in achieving our sustainability objectives in the decade ahead, and would like to thank our employees, shareholders, business partners, and associates for making 2019 a truly successful year.
Together for a Better Tomorrow and Sustainable Future.