If chemical-plant tourism was a thing*, the diminutive cracker in Visp, Switzerland overlooked by snowy peaks and grassy meadows would be on the bucket list alongside the spectacle of a huge Arabian petrochemical complex all lit up at night against the black desert sky. (*I’m not saying I do, I’m not saying I don’t take the odd detour.)
Visp has defied the odds for more than 100 years and plans to do so again as the industry strives to reach net zero. Other sub-scale European crackers are feeling the heat from higher energy costs because they are either isolated or unable to play arbitrage with different feedstocks like the big players.
Fortunately, Visp has a rather unique set up.
The plant, part of what was once Lonza’s specialty chemicals business, was carved out by the Swiss contract drug maker and sold for $4.7 billion in July 2021 to private equity firms Bain Capital and Cinven, who renamed it Arxada. The Visp cracker splits LNG into acetylene and ethylene, which are fed into Arxada’s downstream plants manufacturing a variety of chemicals that preserve anything from food to wood, and ingredients found in vitamins and pharmaceuticals.
Even to the seasoned Marc Doyle, who used to run DuPont and is now CEO of Arxada, the size of the Visp cracker still came as a bit of a shock.
“I thought I used to run the smallest cracker in the chemical industry at DuPont — the Orange, Texas cracker — from like the 1940s. When I saw this unit, I thought oh my god, this can’t possibly be.”
“Literally, the cracking part of this thing fits under my desk,” Doyle said in an interview with chemicalESG.
Despite the unorthodox location, Visp has a rich history in chemical manufacturing. Lonza started out manufacturing carbide for lighting in the late 19th Century, and moved on to metaldehyde, used as a fuel and later as a slug repellant. Fast forward, and providing manufacturing and other services to drugmakers became Lonza’s core focus. That led to the deal with Bain and Cinven, but not before Lonza had already initiated a program to cut NOX emissions.
The cracker, also known as the Acetylene Generation Unit, still accounts for 70% of Arxada’s total GHGs. Doyle inherited a team of about 200 engineers in Visp and they are the ones now working on a plan to make it green.
Doyle wouldn’t divulge any details because it’s “very early in the process.” He did say what it won’t be. The electrically heated steam cracker furnaces or “e cracker” being developed by the likes of BASF, SABIC and Dow wouldn’t suit Visp because the AGU doesn’t operate in the same way: there’s no ethane cracking or steam heating, Doyle said.
So Arxada has to come up with something new.
“The team has some interesting ideas and developments that they are pursuing. We have a very different internal process here so we need to be very creative with respect to how to convert it to something that’s green. My hope is that in a year or two we will be able to talk about the approach we are taking,” Doyle said.
There are plenty of signs that Arxada is keen to get going on sustainability. It just published its first ESG report covering all 25 production sites globally, squashing into less than two years what other companies have taken a lot longer to do. And they appointed Marilyn Johnson as Global Sustainability Leader. Johnson said things have changed a lot since she first started out in ESG some 25 years ago, when getting people’s attention was like “pushing a wet noodle.” For one, she can pick up the phone and speak to sustainability leaders at both Bain and Cinven. That wouldn’t have been the norm back then.
“The perception of private equity would be ESG being one of those things you take care of right before exit. Our approach is the opposite,” said Doyle. “We came out of the gate really hard driving sustainability.”
By his own admission, Arxada’s ESG report doesn’t “have all the numbers and specific commitments in some cases.” In structure, it’s the standard three pillar approach adopted by companies like DuPont. But Doyle sees Arxada’s focus on preservation, whether for food, beverages, industrial cleaning or cosmetics, offering a fast track. The official pledge is to hit net zero by 2050, but he has his sights set on 2030.
And the Visp cracker is sure to be center stage.
“We hope it will thrive not survive. We see this as a huge competitive advantage. We talk about net zero by 2050, I think we need to get there by 2030. Getting there in Europe and being able to offer that to customers is a huge competitive advantage. They don’t want to be shipping chemicals from India and China and they don’t want to have high GHG scope 3 levels. They are all focused on how do I get a local supply chain that’s net zero for a competitive price,” Doyle said.
“There’s a significant first mover advantage for the companies that can crack this, no pun intended. “