Digital Life: Russian Chemical and Petrochemical Industry in the Digital Age

Last week, the fifth ‘Winning Digital Strategies’ event was held in Moscow by the Vedomosti business daily in partnership with the National IT Leader Prize. Senior managers of leading chemical manufacturers met at the round table to discuss the potential of advanced IT implementations at Russian chemical enterprises, with the event being moderated by Andrei Kostin, CEO of RUPEC information and analytical agency.

Industry 4.0 adoption varies by manufacturing sector and represents a good opportunity to create new unique products and technologies. Regarding the chemical and petrochemical sector, digital transformation is a game changer for all production processes. At the event, top managers of RIF Ametist, URALCHEM, Polyplastic, PhosAgro, Avgust, Zirax, and systems integrator CROC, shared their experiences and ideas regarding manufacturing digitalization in their companies.

Dmitry Bratashov, CEO of RIF Ametist plant of FoamLine Group, stressed that keen competition requires prompt and reliable intelligence. Unlike previously when monthly reports were enough for the company, it is now vital to continuously keep an eye on the plant situation and make prompt decisions. According to Dmitry, raw materials account for a lion’s share of expenses in chemical industry. To cut expenses and perform better, the company now analyzes processes in real time, thus improving control over raw material consumption and dramatically cutting procurement costs.

“Today, innovations are a key success driver for not only certain companies, but whole industries, including the chemical sector. Harnessing opportunities offered by digitalization will allow industrial enterprises to reach a brand new level of production with higher product quality, lower cost, and faster time-to-market. No doubt, today's business digitalization adopters will become more competitive tomorrow,” noted Dmitry Bratashov.

According to Svetlana Chekalova, HR Director at URALCHEM, her company strives to gain a competitive edge in both Russia and the world through changing its business model and leveraging digital technologies. She is confident that employees will be able to focus on more creative and intellectual tasks, once all routine processes are automated. Her confidence is supported by successful URALCHEM projects: the company has implemented a platform serving HR needs, such as payroll management, statutory compliance, talent development, training, and performance management, and thus dramatically reducing administration efforts.

“Successful adoption of new technology and business transformation are driven less by technologies themselves (since they are abundant and omnipresent today) and more by people, their new thinking, openness to outer world, and willingness to revamp legacy business models and learn new skills. It is people who make any change, so companies willing to go digital should fascinate and inspire their employees first. Automation and digitalization of HR routine people are involved in may help them develop new skills and get used to new technologies,” noted Svetlana Chekalova.

Evgeny Ambrosov, Technical Director at Polyplastic, told how the unavailability of production data for as little as several hours could affect output and cause customer churn. His company employs digital technologies to improve production quality and specialist qualification. Polyplastic started its journey towards digitalization with equipment upgrade and personnel training. In addition, the company has automated its logistics processes fairly well: a special system controls all raw material movements inside and outside production shops, as well as shipment planning.

Roman Budnik, Director for Digital Technologies at PhosAgro, noted that it is yet hard to tell automation from digitalization. He believes digitalization to be all about big data systems, which interact with each other and make decisions automatically, without involving people. In his opinion, IoT is a component of digitalization. Install sensors on your equipment — and you will know equipment health and forecast repair time. Thus, he shared economic benefits his company gained after installing sensors on ammonia production equipment, which now runs more stable with much less tear and wear.

“Digital transformation is rapidly changing all business areas. Competition is increasingly fierce, and you need to respond instantly. Those who go digital first will gain a competitive edge even faster than you can imagine, while others who ignore this global challenge may lose a race. For PhosAgro, digitalization is one of the core development vectors now,” stressed Roman Budnik.

Alexey Sidorin, Business Solution Architect at CROC, says that digital transformation is not about deployment of certain technologies, but rather a set of solutions designed to improve business value and efficiency by leveraging power of technology. He emphasizes that digitalization starts at HR level, with the transformation of corporate culture.

Alexey believes that digitalization will help manufacturing enterprises address many HR challenges directly at the industrial site, even when hundreds of kilometers away from headquarters. For example, with regard to labor safety, medical kiosks installed at an industrial site can quickly assess a worker’s health via multiple physiological parameters and without involvement of a physician, thus preventing unforeseen problems and injuries. Moreover, Alexey is also convinced of the strong potential of wearable devices (bracelet, bodypack), which are especially important when working in hazardous areas. CROC’s customers have already benefited from the use of such solutions at their industrial sites, with the number of accidents being reduced dramatically.

During his speech, Alexey also told the audience about the benefits of predictive maintenance. This technology predicts hardware failures and downtime and helps management plan and optimize repair costs, while breakdown scenarios can be visualized using augmented reality technologies. For example, malfunctioning equipment will appear red when looked at by operators wearing special AR glasses. The company develops such solutions in its own Virtual Reality Center, with some now being ready for proof-of-concepts and implementation in customers’ business processes.

The expert also highlighted that predictive maintenance is based on accumulated equipment operational data. This is why enterprises must accumulate and retain data to allow for the analysis of various scenarios and forming of hypotheses (e.g. forecasting of equipment breakage). The earlier companies start to collect such data, the more accurate the forecast will be. Consequently, according to Alexey, CROC customers across many verticals are now building Data Lakes, which allow companies to retain large volumes of disparate data for various business purposes.

“Digitalization provides ample opportunities for those who are ready to change. It has become evident that companies can no longer stand aside, but must address digitalization challenges to drive market success. For the chemical and petrochemical sectors, digital transformation not only involves automation of production processes, but also represents a great opportunity to become more agile, competitive and profitable with the help of advanced digital technology,” said CROC’s expert Alexey Sidorin.

Dmitry Ilyinsky, Head of Granulated Products at Production Department, Avgust, said their company had already realized that digitalization would influence every enterprise in the times to come. According to Dmitry, the time interval between “it doesn’t pay to go digital” and “the company is dead” is vanishingly short, and therefore strategic thinking is now about embracing digital transformation and investing more in automation initiatives.

Petr Nomokonov, Development Director, Zirax, believes digitalization will help many chemical companies improve their production by installing even more sensors and collecting even more data. However, before installing anything, economic viability should be evaluated. As one of the first steps towards digitalization, the company created a mathematical model of their plant in order to gradually upgrade its production facilities, thus increasing product output, reducing dust emissions, as well as gas and electricity consumption.

Finally, the moderator highlighted the importance of the event showing the digital service evolution in the industry’s landscape, and wished all attendees successful digitalization.

About the IT Leader Prize

The Annual National IT Leader Prize has been held since 2002. The Organizing Committee includes the Russian Managers Association, iBusiness web portal, Dengi and iOne magazines (Kommersant Publishing House), Intelligent Enterprise, and CROC.

Information Partners (in the past): Business FM radio station, Analytical Banking Magazine, and the Systems Administrator and BIT. Business & Information Technology magazines. Information TV Partner is the World Business Channel. Online partners: Comnews, ICT-online, IT Manager, CRN, CTA (Contemporary Technologies in Automation), National Banking Journal, and Global CIO magazines.

The IT Leader Forum is a landmark IT event in Russia, which has been held since 2002 and is attended annually by approximately 300 executives and IT directors from the Russian and international companies. Last year, presentations were delivered by top managers from Yota, Enter Svyaznoy, Moscow United Electric Grid Company, URALSIB Bank, Sberbank of Russia, etc. In the past, IT Leader Forum special guests included: Steve Wozniak, Apple co-founder; Thomas Frey, Executive Director and Senior Futurist at the DaVinci Institute; Peter Hinssen, co-founder of Across Group and CEO of Across Technology; and Josep Curto, CEO at Delfos Research and professor at IE Business School Madrid.

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About Vedomosti Praktika

Vedomosti Praktika means:

  • Venue for open dialog, opinion exchange and discussion of the most pressing business matters, progressive ideas and innovative technology
  • Venue for Russian and international business communities to review, analyze and apply the best corporate management practices
  • High-level attendees and speakers: executives and business owners, top managers, heads of representative offices and departments of Russian and international companies