reach at lanxess lanxess procurement north america thomas j. o'neill cpo
TRANSCRIPT
REACH at LANXESS
LANXESS Procurement North AmericaThomas J. O'Neill CPO
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Agenda
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LANXESS at a glance
REACH at a glance
REACH at LANXESS Procurement
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Agenda
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2
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LANXESS at a glance
REACH at a glance
REACH at LANXESS Procurement
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LANXESS is one of Germany’s most important providers of polymers and chemicals
Employees worldwide (as of: 2008-09-30)
Global orientation
14,983
Around 44 sites21 countries
Performance PolymersAdvanced IntermediatesPerformance Chemicals
Portfolio
Sales thru 3rdQ/2008 EUR 5,114 bn
Sales in the year 2007 EUR 6,608 bn
5Lanxess Production Sites
Isithebe
Thane
Qingdao
Toyohashi
Brunsbüttel
Leverkusen
Mannheim
Filago
PortJérôme
Uerdingen
DormagenAntwerpen
Marl
Chardon/OH
Sarnia/Canada
Orange/TX
Lerma
Bitterfeld
Porto Feliz
Zaraté
Vilassar de Mar
RustenburgSydney
WuxiBaytown/TX
LaWantzenau
Branston
Zwijndrecht
Hamm-Uentrop
Madurai
Bushy Park/SC
MerebankNewcastle
Shanghai
Burgettstown, PA
Weifang
Birmingham/NJ
Cabo de Santo Agostinho
Triunfo
Duque de Caxias
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LANXESS has built a strong portfolio with leadership businesses
13 Business Units substantially restructured and repositioned
All BUs now occupy leadership positions in their markets
Strategic divestments of four Business Units:
- Fibers
- Paper Chemicals
- Textile Processing Chemicals
- Lustran Polymers
Strategic Acquisitions
- Petroflex
- Chrome International South Africa
Leadership
position
Profitability and stability expectation
LANXESS Portfolio 2008
Divestments
LANXESS Business Units
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Agenda
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LANXESS at a glance
REACH at a glance
REACH at LANXESS Procurement
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Registration, Evaluation, and Authorization of Chemicals (REACH)
Created a single European Union regulatory scheme for all chemical substances.
Entered into force on June 1, 2007 with 11 year phase-in period.
European companies and non-European companies that ship chemical products into Europe, have customers that ship products into Europe, and/or purchase products from Europe are impacted.
Industry is given more responsibility. The government no longer must scientifically prove that the use of a substance is dangerous.
The chemical industry must demonstrate (in conjunction with the user) that the use of a certain substance under normal circumstances is safe.
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Key REACH Requirements
Pre-registration: Companies pre-register at no cost on-line providing basic information on substance identity and company. Allows phased-in registration and identifies companies that produce the same chemical to share information and develop joint registration packages.
Registration: Requires submittal of a technical dossier with extensive data on the toxic characteristics of the substance, which will entail substantial testing and data gathering. Will be substance specific and chemical manufacturer or importer specific.
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REACH provides an extended time period for registration only for companies which have pre-
registered their substances
REACH provides an extended time period for registration only for companies which have pre-
registered their substances
REACH - Registration Deadlines
Pre
-Re
gis
tratio
n
RE
AC
H e
nte
red
into
forc
e
June 1,2008
Dec. 1,2008
June, 12007
Nov. 30,2010
May 31,2013
May 31,2018
1-100 tons per year
100-1,000 metric tons per year
≥ 1,000 tons per yearCarcinogenic, Mutagenic or toxic for Reproduction ≥ 1 ton per yearVery toxic to aquatic organism ≥ 100 tons per year
100-1,000 tons per year
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REACH Strategies for Non-EU Companies exporting to the EU
Supplier Registration
Register via an EU-based ‘Only Representative’
or
Depend on EU based customers to register as an importer
Customer Registration
Customer registers as importer and has responsibility for REACH requirements
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Cost of registration depends on quantities, properties and uses of the chemicals
Quantities manufactured or imported
1 - 10 mt/y 10 - 100 mt/y 100-1000 mt/y > 1000 mt/y
Annex VII Annex VII-VIII Annex VII-IX Annex VII-X
Required tests according to:
Technical Dossier
Chemical Safety Report (CSR)
Exposure evaluation and risk assessment*
Registration documentsIntermediates
Increasing Costs
*if sustances are classified as „dangerous“
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Registration as Intermediate (Article 18-Certificates)
Substances declared as intermediates and handled under strictly controlled conditions result in reduced administrative costs.
Registration as intermediate can save up to 80 T€ per substance only in administration cost.
Additional costs for required tests can be estimated after gap analysis.
Type of Substance Registration
Fee (€)
Dossier Compilation
(€)
Total administrative
Costs (€)
Intermediates 1,600 65,000 66,600
Not Dangerous
31,000 85,000 116,000
Dangerous 31,000 115,000 146,000
Diff. = 80 T€ Diff. = 80 T€
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Agenda
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LANXESS at a glance
REACH at a glance
REACH at LANXESS Procurement
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REACH Strategy at LANXESS
Complete Pre-Registration of the current LANXESS portfolio.
Pre-Registration of substances with possible future relevance.
Pre-Registration of all Raw Materials independent of supplier's
intention to register.
Pre-Registration of strategic substances for all LANXESS Legal
Entities within the EU independent of our current production sites.
For LANXESS Legal Entities outside of the EU, LANXESS GmbH
acts as ‘Only Representative’ so that they can export into the EU.
“Keep every option open”“Keep every option open”
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Ensure further delivery of raw materials and maintain flexibility in sourcing
Request our vendor’s intention to pre-register / register via a standardized questionnaire We expect complete pre-registration and registration of all substances
supplied by our vendors.
Own Pre-Registration of all raw materials (current and future portfolio) independent of vendor’s intention to register Enables LANXESS to act as an importer with extended registration
periods.
LANXESS Procurement REACH Implementation
Ensure future delivery of raw materials and maintain flexibility in sourcing
Ensure future delivery of raw materials and maintain flexibility in sourcing
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Supplier Survey 2008
How we minimized open requests:
Vendors who didn’t reply sufficiently were reminded by an automated procedure.
Any Open Vendor/Material combinations were followed up directly by the responsible Purchasers (Business Contacts).
An eQuestionnaire-Tool was implemented to ensure automation of requests and efficient documentation of supplier replies
An eQuestionnaire-Tool was implemented to ensure automation of requests and efficient documentation of supplier replies
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REACH Supplier Survey (1860 Substances)
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
Febru
ary
Mar
chApril
May
June
July
August
Septe
mber
October
November
0
10
20
30
40
50
60
70
80
90
100
completed open Percent
%REACH compliant substances
REACH compliant substances
No interruption in future supply is expectedNo interruption in future supply is expected
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What do we expect from a non-EU based Supplier and his ‘Only Representative’?
Complete pre-registration and registration of all REACH
relevant substances delivered to LANXESS
Written statement that he has appointed an “Only
Representative”
Pro-active information about status and progress
Cost Transparency in terms of REACH
All LANXESS applications are to be covered by
registration
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REACH at LANXESS Procurement: Next Steps
Estimate cost and evaluate impact on supply portfolio
Prepare own exposure scenarios and risk assessments to protect Intellectual Property in terms of sensitive end-uses
Consider option to register on our own
Thank you very much foryour kind attention.
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Backup: Questions and Answers
What does LANXESS expect from a supplier's "OR"?
Competent preregistration and registration of the substances to be delivered. The LANXESS uses should be covered in the Exposure Scenario annex to the Safety Data Sheet.
Will LANXESS show preference to suppliers that allow you to act as OR. Have you aggressively marketed your OR activities and if so - do you have many companies that have signed on?
LANXESS will only act as OR for own subsidiaries outside the European Community
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Backup: Questions and Answers
Intermediates - are you planning capital improvements to your facilities so that intermediates can be rigorously contained?
There should be no need as intermediates are already handled under safe conditions at LANXESS. In any case, all intermediates are being reviewed for REACH compliance.
Did LANXESS pre-register products you purchase? If so, in instances where several suppliers also pre-register, do you intend to register? How will LANXESS handle the next stages
LANXESS preregistered all needed substances as a precaution. Registration will be done in single cases only, e. g. for possible imports after cost-benefit analysis.
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Backup: Questions and Answers
What is LANXESS doing about products you buy that were not pre-registered by any suppliers - if any?
LANXESS pre-registered all substances needed and would be able to act as importer/ manufacturer.
How will LANXESS handle SIEF participation for products pre-registered that are not produced by LANXESS (this assumes you have some!)?
LANXESS may not be able to provide information or data from previous studies but we may have to participate in the costs of future studies required to register under REACH.
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Backup: Questions and Answers
Is LANXESS doing anything special to protect your IP - especially in regards to "sensitive" end uses for purchased products?
Yes, of course, LANXESS may prepare own exposure scenarios and risk assessments to protect Intellectual Property in terms of sensitive end-uses
Will REACH have an impact on where LANXESS sources toll production?
Maybe – any incremental costs for registration for toll produced products will have to be considered.
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Backup: Questions and Answers
Will LANXESS preferentially purchase products from companies that are pro-active about REACH?
We expect REACH compliance from all of our suppliers: No REACH compliance means no business.
Will you help suppliers comply with registration by offering to offset the costs?
LANXESS expects competitive raw material costs, even under the conditions of the REACH regulation
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Backup: Questions and Answers
Supplier survey - were there consequences for no response? Did you succeed in getting responses from enough of your suppliers to convince you that acquiring raw materials will not be a problem?
Based on the results of our survey we do not expect any future interruptions in supply due to REACH.
How do you intend to handle SIEF participation - with internal resources or external resources?
Regarding our purchased raw materials, we are not an owner of data. Therefore our SIEF activity will be limited. There should be no need for LANXESS to employ external resources.
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Backup: Questions and Answers
Does LANXESS have the ability to perform necessary registration testing in house. If not, how will you go about outsourcing this activity?
LANXESS has arranged contracts with external service providers to perform any testing required for registration under REACH.