In this exclusive interview, Samir Hifri, Covestro’s chairman and president, offers his perspective on the goals, challenges and accomplishments of the company, as well as the challenges faced by the chemical process industries
Samir Hifri joined Bayer, the predecessor to Covestro, as a management trainee in Pittsburgh, Pa. in 1998. He has since held various positions in North America, Europe and Asia, including global product manager in Germany, director of North American product management, commercial lead for Japan and Korea and head of the coatings and specialties business in Shanghai, China. Most recently, Hifri led the Covestro Hong Kong site as managing director and head of APAC Supply Chain & Logistics. Hifri holds a bachelor’s degree in international finance from Duquesne University in Pittsburgh, Pa., and an executive degree from INSEAD in Fontainebleau, France.
EXECUTIVE INTERVIEW
How would you describe your company?
Covestro is one of the world’s leading manufacturers of high-tech polymer materials. We like to say that you’re never more than a few feet away from a Covestro product, although you may not realize it. We invented polyurethane and polycarbonate, and those beginnings still serve as the foundation for the thousands of variations of polycarbonate products and raw materials for polyurethanes, coatings and adhesives that we produce today. We have spent decades refining the chemistries, exploring applications and working with our customers to tailor our materials to their precise needs. Today, the products our customers create using Covestro materials are critical parts of peoples’ lives, from electric vehicles (EVs), smartphone components, energy-efficient homes and businesses, sports and leisure applications, to some critical healthcare applications.
What goals are you trying to achieve?
First and foremost, we aim to keep our customers at the center of everything we do. Ensuring their success directly impacts our own success. That will never change. What has changed, however, is that we are looking at our business through a telephoto lens, focused on the future.
That future is one where Covestro’s business embraces the circular economy and has a fully circular business model. It is a very ambitious vision, but one that we have concrete steps in place to achieve. To do so, we have set a mid-term goal to be operationally climate neutral, that is for our Scope 1 and Scope 2 emissions, by 2035. Longer term, we aim to be climate neutral for Scope 3 by 2050.
Bringing that logic back to our customers, it means that they will have access to more sustainably produced raw materials from Covestro, which will directly support their own sustainability goals. One of our major U.S. customers recently said, “There is no downstream decarbonization without upstream decarbonization.” As a company with a value chain position further upstream, we take this responsibility very seriously— so much so that we have developed a new portfolio of “circular intelligence” or CQ products. We already have hundreds of products in that portfolio, and we aim to have every one of our products available in a CQ version, which means they incorporate at least 25% alternative, non-fossil raw materials.
What challenges does your company face?
What is unique about our current business environment is that we’re dealing with multiple issues simultaneously. From lingering inflation around the world to ongoing conflicts in Europe and the Middle East, to lingering supply chain interruptions, any one of these topics would pose challenges in a normal business climate. Additionally, Covestro is headquartered in Germany, and subsequently we have felt an acute impact from increased energy prices, which still remain at a higher level.
From my position sitting in the U.S., however, this presents opportunities to leverage Covestro’s strong global footprint to offset some of the challenges felt in Europe. I strongly believe that the U.S. in particular is primed for innovation— specifically, sustainable innovation. We have already been able to leverage incentives made available by the government for a major decarbonization project at our biggest production facility in North America, located in Baytown, Texas. We also see other opportunities for major sustainable investments in the near future. More broadly, I believe this speaks volumes about the benefits of collaborating with government on shared decarbonization goals.
The U.S. market is of major consequence for Covestro. The U.S. remains a hot spot for innovation across many industries where our customers play an active role. The combination of abundant and low-cost energy, innovation and proximity to our largest and most forward-thinking customers, as well as strong commitment from government to boost domestic manufacturing present Covestro with unique opportunities for strengthening our global performance.
What challenges do you see for the chemical process industries as a whole?
While working with the government to achieve shared goals around sustainability is important, the other side of the coin is an expanding, and in some cases, overreaching regulatory environment that is causing uncertainty throughout the chemical industry.
It is important to remember that the business of chemistry touches almost every other industry. Without it, there is no modern life, and certainly no sustainable future. As such, there is a fundamental disconnect between the goals set forth both by the government and by private companies alike, and the environment in which those goals are to be achieved. A prime example of this are the ambitious targets for EV adoption and the near simultaneous introduction of regulatory proposals that have the potential to prohibit the production of the very materials critical to producing EV battery housings and charging stations.
The chemical industry requires a level of certainty to operate efficiently. Assets and production infrastructure are long-term investments, often times with a relatively long timeframe for return on those investments. A regulatory environment that changes every few years creates a level of uncertainty that impedes innovation at best and shutters businesses at worst.
The silver lining, as I mentioned already, is that the shared goals for a sustainable future are only made possible through the business of chemistry. And, industry has a seat at the table. There is a path ahead that, while it may look different than business-as-usual has in the past, is one that industry can walk with other stakeholders from government, non-governmental organizations (NGOs) and others. Renewable energy, made possible by the chemical industry, will also power the chemical industry. Alternative, non-fossil raw materials will be the source of the products that so many of us use every day. Innovative new recycling technologies will help us discover ways to reuse everything from cars to mattresses. The future is bright, and chemistry is at the center of it.
What accomplishments are you most excited about?
I am incredibly proud of the progress our colleagues have made towards our journey of becoming fully circular. Despite the challenges we face externally, we are controlling how we play and are taking concrete steps towards our vision. Here in the U.S. specifically, in the last year alone, we managed to achieve some major milestones.
At our Baytown, Texas and Newark, Ohio sites, we received International Sustainability and Carbon Certification (ISCC) PLUS. This milestone gives Covestro ISCC PLUS certification in each of its major regions globally and is a critical component in the production of our CQ product portfolio. Using our existing infrastructure, we are now able to track sustainably attributed raw materials throughout our production process. This enables us to supply more customers across the U.S. and around the world with more sustainably produced products.
We also recently announced our Scope 3 emissions targets. This builds on our previously announced Scope 1 and Scope 2 targets, which were for operational climate neutrality by 2035. Now, we aim to be completely climate neutral by 2050. We have a concrete plan in place to achieve this ambitious target, which will require a transformation of our entire supply chain, working with our suppliers and customers to be more sustainable, as well as a focused approach on how we produce our own products and run our sustainability projects.
None of these goals would be possible without the support and engagement of our employees and the communities where we operate, which is why I am immensely proud of how Covestro employees across the U.S. consistently give back through volunteerism, financial contributions and incorporating themselves into the fabric of their communities. Covestro employees are committed to their communities and the company, and their passion will drive our future success as an organization.
Department Manager: Dorothy Lozowski
Company: Covestro
Number of Employees: Approximately 17,500
Corporate Headquarters: Leverkusen, Germany
Locations: 48 production sites worldwide
Leadership: Markus Steilemann, CEO
Main Products: Polymer materials
Website: www.covestro.com