Innovation and Sustainability in Focus: An Exclusive Interview with TPI Polene on Pioneering Excellence in Industry Practices
TPI Polene: Innovating Sustainability and Excellence in Industry
Give us a brief about your company and its vision.
TPI Polene begun producing plastic polymers in 1978 and was the first to establish a fully- integrated petrochemical plant in Southeast Asia. To this day it is the largest, single location producer of high-value added (HVA) EVA polymer in Southeast Asia. HVA-EVA is used extensively in the manufacturing and in the fast-growing hotmelts/adhesive as well as PV applications. The Group has since diversified into cement, building materials, renewable power based on waste-to-energy (WTE) derived from municipal solid waste (MSW) and bio-organic products for agriculture application. It is now the 2nd largest cement producer in Thailand and also the largest power producer based on MSW. From the handling of MSW sprung the division dealing with bio-organic compounds that has huge potential to contribute to sustainable agriculture in Thailand.
The group aims for a sustainable growth based on bio-circular green (BCG) economy with the support and extensive use of research and development tapping the minds of over 100 scientists and engineers (over 500 if we include the engineers in operations). The Group constantly tinkers and tweaks processes to bring marginal efficiency gains, reduce our carbon & environmental footprint and expand our product suite & solutions that now numbers to 5,000 SKUs so we can cater to the needs of our customers. Our tagline “we build the future” captures our goal to bring to the market top, world class products in construction materials, adhesive and PV polymers, and bio-organic products for agriculture as well build power capacities that use MSW as fuel thus help address the ever-mounting garbage problem in Thailand.
Can you provide an overview of TPI’s core business activities and its primary areas of operation?
Our assets and key features:
Although we began as a petrochemical producer, our primary assets now are the facilities producing cement & building products (collectively termed as ConsMat division). This division accounts for 56% of the total and 57% of our sales. However, EBITDA margin is low, below 10%, and asset turnover is also low (below 1x).
In the 1H of 2023 a significant portion of our profitability (EBITDA) came from Power & Utilities (49%) and Specialty Polymers/Chemicals (29%) where margins were very high, 60% in Power & Utilities and 27% in Specialty Polymers/Chemicals – calculated on a Group basis.
What sets TPI apart from competitors in the industry, and how has the company achieved a competitive edge?
There are many factors that differentiate TPI Polene from closest peers but we highlight two: 1) production facility and 2) strong R&D culture & capabilities.
Production facility
Our production facilities are comparatively new to that of peers, modern technology, highly efficient. Thus, these plants can be easily modified to use the most recent technology. There are many examples, and we highlight here a few. Our cement plant was the first to capture and recycle waste heat thus reducing the energy consumption from the grid. Very recently we retrofitted our calciner so that we can use (even heterogeneous) MSW instead of coal in the clinker production process. Apart from some potential carbon merit, this move will also reduce our cost of clinker production.
MSW in TPIPL’s Calciners
Our Specialty Polymer division successfully tested a reactor at 3000+ bar pressure and this will usher new and even higher HVA specialty polymer. Our specialty polymer generates EBITDA margins for above those of closest local peers and this innovation will create a moat to our margins.
Our MSW-fired power plants imbeds as number of technological innovations and multi-years of processing techniques to produce power at very profitable level. Currently we are modifying our 150 MW coal-fired power plant. This technically challenging project, rolled out into three phases, is targeted to be completed by the end of 2025. By 2026 our power division would be fossil-free.
Strong R&D culture and capabilities
TPI Polene group does not engage in bolt-on acquisitions. We are strictly home-grown leveraging on the technical competency of the over 100 scientists and engineers primarily focusing on R&D, actualizing the vision of our highly competent top management who are coming mainly from a strong engineering background.
Because we are home-grown we developed our R&D capabilities by building upon the accumulated experiences and knowledge. And we operate on-the-ground we can readily spot emerging gaps in the needs of our customers amidst the ever changing product demand landscape. We have over 5,000 SKUs in our product suite and over the years we have racked up a long list of many firsts, a few of them are highlighted below:
On 1st June 2023 we double down on our commitment to reduce the carbon footprint of our cement plants by launching the Green Cement & Building Products anchored on lower carbon footprint of our calciners and product innovation of low-clinker cement while maintaining product tensile strength and other characteristics.
Business excellence often involves a commitment to quality. How does TPI maintain high standards in product and service quality?
For the ConsMat we make sure the performance coefficients adhere (and in many cases surpass) the specified industrial standards. We employ digitalization in QC especially in our specialty polymer division whereby product specifications pertain mostly to fractional chemical/physical properties. For new and innovative products, especially relating to the bio-organic compound, we subject them to rigorous laboratory testing, assessment by specialist/experts and then testing them on the field.
TPI Polene is known for its sustainability efforts. Could you elaborate on the company’s sustainability initiatives and their impact on both the environment and the business?
The group aims to be net zero by 2030. Here is the Sustainability Ecosystem of our Production Facilities
Achieving business excellence often involves effective leadership. What leadership qualities or strategies have played a key role in TPI’s growth and success?
The top management is very hands-on and maintains a direct two-way flow of communication and feedback loop in the internal reporting system and in the weekly with the middle management and divisional heads. Strong work ethics are also instilled via leading-by-example.
BAU – business as usual – in most companies refers to the day-to-day operations. In TPI Polene group it goes beyond that to encompass mentoring so that as people retire someone is there to carry the baton of management and execution and to ensure that it is business-as-usual.
Business excellence also extends to employee engagement and development. What initiatives does TPI have in place to nurture and empower its workforce?
- Trainings and continued up-skilling especially for those in operations
- Participation in industry conference and exhibition
- Incentive structure
Looking to the future, what are TPI’s plans and aspirations for maintaining and enhancing its business excellence?
We do not disclose details but here are a few of our strategies in broad terms:
- Continue to pursue R&D to bring innovations and to adapt quickly into a marker that is increasingly technology driven
- Maintain cost competitiveness via constant improvement/enhancement of processes to bring unit cost of production
- Maintain product competitiveness by adhering (and surpassing) to industry standards and coming up with new products and solutions that are attractive from value-for-money standpoint
Could you please share tips for the next generation of businessmen on how they should plan their journey based on your experience as a successful business leader?
Winning attitudes
Pursue and develop home-grown, organic R&D capabilities
Use top-of-the class technology
Stay close to customers and look at their evolving needs
Maintain conservative capital structure
“Mitigate Risks, Foster Opportunities, and Ensure Sustainable Growth”
“Technology driven and expanding business using cutting edge technologies and latest techniques”
“Pursue and develop home-grown, organic R&D capabilities”
Company Name : TPI Polene Public Company Limited
Website : www.tpipolenepower.co.th
Management Team
Mr. Prachai Leophairatana, Chief Executive Officer
Dr. Pramuan Leophairatana, Vice Chairman
Mrs. Orapin Leophairatana, Vice Chairman
Mr. Pakorn Leopairut, President
