More than 15 years ago, a joint venture between two industry giants, Shell and ExxonMobil, resulted in the foundation of a new organisation — Infineum. This business was set up to focus predominantly on developing and selling petroleum additives to service the transportation industry, rather than supplying more general industrial lubricants. Today, Infineum sells its products to all major oil companies and lubricant producers, and its additives feature in approximately one-third of all combustion engines around the world. It also has divisions focused on fuels additives — used largely in refinery applications — and on power transmission fluids. The business has built itself up to have a solid reputation in the industry as a technology leader and a highly reliable supplier.
Trevor Russell, the CEO of Infineum, joined Exxon in 1980 and over the years has held various positions within the business. When the joint venture occurred in 1999 he took on a leadership role with Infineum, holding global VP positions in sales, marketing, supply and strategy. As a result, Trevor played a major role in the group’s drive to invest in differentiated products and thereby become a market leader in top-tier segments on a global scale. Furthermore, his history with the business has allowed him to spearhead its investment in the Chinese and South East Asian markets, growing its presence in the fast-evolving Asia–Pacific region. Both of these strategic focuses still ring true for Infineum in 2016.
Our strategy is based on leading technology, outstanding supply reliability and growing in emerging markets.
As a veteran of the additives industry with more than thirty-five years of experience, Trevor was a fitting choice to become the next CEO of the business. In July this year he was appointed to the top spot, giving him the opportunity to continue to execute the strategic plans he had played a significant part in setting in his prior roles.
Leading technology, outstanding supply reliability and growth in emerging markets
“Our strategy is based on leading technology, outstanding supply reliability and growing in emerging markets. The strategy we are now pursuing has come from many different minds and many different efforts, and my predecessors as CEO all played a role in defining it and getting it going. As I was in the chief strategy and operational roles throughout much of that period, however, I feel high ownership for it. And now, as CEO, I am in a position to execute that strategy and look for the next places to take the business in the longer term. I think we have earned a record for safe and reliable supply, and for leading technology, but my job is to maintain and extend that record while positioning us for the changes that will define our industry in the longer term.
“Our industry is driven by the need to provide speciality chemistry that optimises the performance of the internal combustion engine, power transmissions and fuels,” he says. “All of these, in turn, are impacted by the continual drive to reduce emissions, gain fuel economy and achieve best-cost refinery economics. Technology leadership is about having excellent products. We want to be a leading player in our industry, and that means working collaboratively with our customers to develop the best products and then supplying them flawlessly. It is as simple and as difficult as that.”
Attention on Asia-Pacific
While Trevor stresses the importance of maintaining Infineum’s position in its heartland markets, Asia–Pacific is a strong priority within the organisation’s strategy. As Executive Vice President for Sales and Supply, Trevor was instrumental in proposing and overseeing two recent major projects in Singapore, and in 2013 he moved there, to concentrate even more of his attention on this high-potential geographic area. “Our shareholder companies had Asia-Pacific plans for their additives businesses in the 80s, but in my time with Infineum we have watched the region really become an engine of industry growth. In addition to the Singapore projects, we have developed a clear strategy for growth in China. We previously had a branch office in Beijing with about fifteen people, but we reshaped our China strategy in 2010,” Trevor explains. “Now we have established a Business and Technology Centre in Shanghai with fifty people working in it. We have also built a plant from scratch on a green-field site in Zhangjiagang, in Jiangsu Province. The way we have positioned Infineum for growth in Asia, particularly in Singapore and China, is something I am proud of. I feel fortunate to have played a role, along with many others, in all of these developments.”
While Infineum is a global business with headquarters in the UK and US, the major growth region for the business and industry more broadly is Asia–Pacific. “I was offered the chance to come out to Singapore about three years ago, because it was felt that we needed an EVP-level senior manager in our biggest growth region,” says Trevor. “I say ‘offered’, but in fact I was a very willing volunteer. It has been an incredibly rewarding learning experience for me personally, but I hope and believe it has paid back for Infineum as well. We have been able to execute major projects and grow our talent base in this vital region in my time here. Though I will eventually move back to my base country, the UK, maintaining a top leadership presence here in Asia is very important.”
Staying ahead
Trevor admits that it has not always been smooth sailing; plenty of challenges have popped up along the way and they will continue to do so. In the short term, he says, these key challenges include: building on a strong existing brand; continuing to focus on the business fundamentals such as industry-leading safety, ethics, controls and compliance; and continuing to invest in technology and assets to meet the emerging needs of customers. It is these investments in technology, innovation and supply that will help keep Infineum positioned as a top-tier supplier of premium products in the industry.
If those short-term issues are internal, then medium-term, the business is more focused on the competition and the external environment. “New entrants are being attracted into the industry and existing players are expanding their facilities,” Trevor says. “In some cases these players are less capable technology suppliers, but they are learning, and we take them seriously. How we react to these challenges will determine our medium-term profitability. Our resolve is to stay ahead of the market on the key value drivers of technology, innovation and flawless supply.”
Infineum’s long-term challenges reflect industry trends and the current economic environment. According to Trevor: “The internal combustion engine has longevity and is continually improving its emissions performance and fuel economy. However, environmental pressure will force changes with regard to electric vehicles, shared mobility and investments in public transportation,” he says.
“These could all threaten the long-term prospects for the internal combustion engine. Our position regarding these developments will play out in the next decade or so, and you can imagine that we are thinking through our positioning, so as to be ready when the signposts indicate.”
Locals to lead
And then, Trevor adds, there are the people challenges. “Like many traditional industries, we have a demographic issue with retirements about to peak,” he says. “We need to attract bright, young millennials into a traditional industry and show them exciting development and career opportunities. Our expansion into both Asia–Pacific and other parts of the world requires local nationals to lead our businesses in the future.
Technology leadership is about having excellent products. We want to be a leading player in our industry, and that means working collaboratively with our customers.
“We want our workforce to mirror our customer base around the world, so we are working to build on our already significant diversity. We have many nationalities and cultures represented in our business, and a steadily increasing proportion of women. Still, like many companies in technical industries, we have to work to ensure that an expected proportion of local nationals and women are actually leading our business in more senior roles.
“In my leadership team there are seven people and we have six different nationalities across five locations in that group. This is a perfect example of having the workforce mirror the marketplace. It’s very important to me that everyone feels they have the chance to be the best that they can be in Infineum.”
A strong team of expert scientists and engineers
In addition, Trevor says, “We are an expertise-driven business, so we always need to attract — and keep — highly-qualified scientists and engineers right across the world. Our talent strategy is based around three elements: attracting the right people, developing them, and retaining them over time. To do that we ensure we offer competitive terms and a supportive, stimulating and collegial environment.”
Trevor understands that he can’t take Infineum into the future successfully without a solid support network. This comes from his diverse team, but also from his loyal network of supply-chain partners. Relationships are formed with suppliers in two key areas: the ongoing and stable supply of products, and the technologies which underpin Infineum’s solutions.
“Our purchasing philosophy is based upon supply security; that is actually more critical to us than price,” Trevor says. “Of course we are always tough price negotiators; we make sure we have the right contract structures in place, but price is not the only factor. I guess you could say that’s our purchase or procurement philosophy — cheap but unreliable is not an option. Our margins are predicated on value creation through great technology and great supply reliability, so that is how we approach our supplier relationships.
Joint-development agreements to produce the right products
“Technology is the other crucial area. We don’t produce all of the components that go into our technology, and we will never be able to do that. Thus, it is critical we work with suppliers on what we call joint-development agreements. We constantly need to look for new, breakthrough technologies that can be made at the lowest possible cost. That’s why we work hand-in-hand with our suppliers in these joint-development agreements; to ensure that we have the right products coming through to our businesses. We can’t be experts in every single area; we have to reach out to a variety of suppliers to jointly develop the technologies with us. It’s for mutual benefit. We are a fair procurer of products and we also have a particularly strong eye focused on the technology breakthroughs that suppliers can give to us.”
Trevor continues to explain the many benefits that come out of having robust relationships with suppliers and other key partners. “In terms of supply, we have long-term product movement and shipping contracts — by long term, I mean in excess of fifteen years of working with a certain supplier — that allow them to really understand our business, and us theirs. They have embedded their resources into our facilities and they work closely with us. These long-term partnerships give us the reliability of supply that others in the market may not have. Also, just as importantly, these relationships underpin our philosophy and enhance our reputation as the most reliable supplier in the industry.
We are listening to our customers, and they are telling us that they want even more innovation, and they want it as quickly as possible.
“There is also the technology angle. We work with a major international chemical supplier, and we co-develop a variety of products with them. These products are specialised components that bring performance to our customer package. That relationship has existed for more than ten years and we share the benefits with that supplier thanks to the performance they bring with regard to the product technology.”
Furthermore, there are the relationships developed with customers that are just as important to Infineum’s success as having talented employees and highly reliable partners. Trevor says he listens very closely to the wants and needs of his customers, but also to their customers, the engine manufacturers, because at the end of the day those are the people Infineum exists to serve. Every three years an in-depth customer survey is performed with feedback from the customers promptly passed on to all parts of the business and acted upon. “This spirit of collaboration with customers, OEMs and suppliers is central to our business model. We are always working on new product development and that depends on very close trust and relationships based on mutual understanding. Obtaining this structured feedback from customers on a regular basis gives us an opportunity to understand where they see us competitively, so that we can improve in the things that really matter to them: innovation, differentiation, technical deployment and responsiveness.” Technology — both innovation and application — forms the lifeblood of Infineum’s business, and large investments are made every year into its research and development department. This ensures it always stays at the forefront of any technological advancement.
More than 1,900 patents and patent applications around the world
Trevor says that this focus is absolutely crucial, because it is the only way Infineum can continue to offer a differentiated product portfolio and the right deployment support to its customer base. Reflecting this, Infineum holds. It has production facilities in most regions of the globe, and research and development centres in the UK, US, Japan, China and Singapore. While there is always a strong focus on operational excellence, the real job for Infineum is its technology delivery. “We are listening to our customers, and they are telling us that they want even more innovation, and they want it as quickly as possible. Therefore, we are investing heavily in our technology facilities and expertise, to make sure we can deliver products to them which are cutting-edge and world-leading.
“This industry is typically quite conservative. It’s about meeting specifications and then going beyond those specifications through innovative technologies. We really need to be listening to the marketplace, listening to the engine builders and listening to the customers to fully understand their existing or unexpressed needs, as their regulatory and technological context changes. We are getting the best brains together who can use their pure science and applied chemical and engineering expertise in tandem, to come up with breakthrough products. This is an industry that has tended to advance through evolution rather than revolutionary breakthrough. It’s our job within that evolution to work out where we can break out and provide innovations that our customers can ultimately monetise.”
For more than ten years now, Infineum has been pursuing the same fruitful strategy and it has been consistently successful along the way. Under Trevor’s direction this positive trajectory looks set to continue. “We believe we are able to convert
our technology and supply reliability into better profitability and thus reinvest into better products for the future. I believe that what sets us apart in this highly competitive sector is our commitment to this strategy, and our deep understanding of what it takes to do it well. I stress to all of our colleagues at Infineum that safe, reliable and responsive operations, and innovative science embedded into leading products, is what keeps us going. Though we are clearly doing a lot right, there’s always work to be done, and we will strive to improve and become even more innovative and responsive than we already are.”