The only way to get out of the crisis quickly and avoid lockdowns is vaccination, says in an interview for Economedia Andreas Lier, CEO of BASF Romania and president of the Romanian-German Chamber of Commerce and Industry (AHK Romania).
According to him, Romania could be a leader in electrifying the chemical industry, an opportunity that could give a direction to the development of the industry in this country, and the potential development of green energy could even be a competitive advantage for our country.
Lier states that the Romanian workforce is increasingly lacking and, unfortunately, it’s the talents that often leave.
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According to the head of BASF, Romania now has the great opportunity to provide highly sought-after specialists, such as data analyst, artificial intelligence and machine learning specialist, big data specialist, process automation specialist, digital marketing strategist and others.
At the same time, he says that Romania can become an innovative hub, “where people never leave, where people return”, taking into account that in cities like Timisoara and Cluj big names of the German car industry invest in innovation hubs and in innovations.
Watch FULL VIDEO INTERVIEW with Andreas Lier, CEO BASF Romania and president of the German-Romanian Chamber of Commerce and Industry (AHK Romania)
https://vimeo.com/inquam/economedia-basf
Filming and editing: Ovidiu Micsik, Inquam Photos
I remember the former Managing Director saying that BASF Romania has managed to easily overcome the past crisis, in 2012. How was the past year and a half, from this point of view?
BASF is the leading chemical company in the world, with more than 150 years of tradition globally. Here in Romania BASF is almost 30 years. And BASF Romania – as many German companies and international companies – maneuvered relatively smoothly through the corona pandemic last year. The crisis is not over, we see again that the cases are rising, but we have other problems and challenges in focus and other opportunities as well.
Have you encountered any problems in the past year and a half, like supply chain disruptions?
Last year, of course, when the corona pandemic came, the safety of our employees was the highest focus and that of our customers. So we changed immediately the format of working collaboration, from physically to hybrid, and at the beginning also mainly digital.
We have also experienced certainly supply issues, as borders were at the time also under the threat of being closed, it became more and more critical for the trucks to deliver. Also, the supply chains were interrupted, broken sometimes even into pieces, during this time. But quickly everything came together so it was more or less a month or two that was really problematic.
Do you see any of these problems continuing in the future?
Supply topics – certainly, in one or other areas, continue at the moment. It’s coming from the semiconductor crisis, coming over from Asia here into the automotive industry. Also, different forces majeures and tight supply chains, but this was related more tot a quick recovery of the industry and that the demand became more under threat here.
What we also did during this time: BASF is very much engaged into all kinds of advocacy, in kinds of corporate citizenship activity. So we are engaged very much into the association here, for example, with AHK Romania, German-Romanian Chamber of Commerce and Industry.
So we supported the Kurzarbeit for the industry and it was finally and successfully implemented in Romania, supporting our customers and all customers in all companies here in Romania, so that they could maneuver safely through the crisis. And what is more important is that they could start immediately after the significant downturn in the crisis.
So this is a very good and valid instrument and we are happy that the government took over this proposal, supported it and also further developed it.
During the corona crisis, the home isolation, we went also to the virtual team buildings, meetings, and different lessons with the team. Also, of course, we are in the stage of motivating the colleagues coming back to the office, but with a certain possibility not to do this. So we are working on the things normalizing.
We also believe that the only way out of the crisis is vaccination. So I can only encourage everyone in the country to vaccinate. I’m responsible for both countries, Bulgaria and Romania, and unfortunately both countries are at the last places in the share of vaccination: Romania below 30% and Bulgaria even below 20%. And there are now deaths which are not needed at all anymore. I read a statement from head authorities which just mentioned that more of 90% of all deaths are unvaccinated people. I really encourage everyone to vaccinate, and also for the country and the economy; that’s the only way to come quickly out of the crisis and avoid lockdowns.
Because you mentioned the work format, I would like to ask you if you have made any changes in the work environment for the return to the office. And if we are returning to the offices, what would be the model in the future?
We can certainly say that the Covid last year started an acceleration of digitalization of work processes, like using digital tools, for example videoconferences. It accelerated the digitalization, but also the upskilling and the learning of digital tools, education technologies and so on. We supported and support this also now in our company. It accelerated automatization of tasks a bit. These reskilling programmes that we are looking in, that’s going even into topics as virtual leadership, that we have to work more and more virtually.
On the other side, we see that we are coming slowly to the future of work. And basically, Covid was one of the facilitators or drivers, it was really moving the future of work into a quicker direction, to a new future of work, which means hybrid.
And when I’m talking to stakeholders, and to partners and customers, many customers and partners and now considering the changing of offices, reducing office space – often a quota of 30% was set – and they are coming to as a form of collaboration, of hybrid forms, where people are coming to the office, but also work at home. Flexibilization of the working time is now coming more and more in focus.
We have also seen that the corona crisis led to – from my perspective – to even more effectiveness and efficiency, because the decision processes become more fast. In the past we had hundreds, thousands of managers who were on business trips and to reach someone was difficult. Now you can get people quickly with Webexes, Zoom conferences, and during this time decisions are made. Also inviting high class speakers into your meetings is now possible.
Of course, these technologies were always available in the past already, but it was basically like a catalyst, like a facilitator, this corona crisis, to change the mindset and the behavior. It takes time for people to change the behavior. And it was now the period when people were forced to change their behavior so it became more into our DNAs this new working mode. Basically we can say: yes, corona accelerated the arrival of the future of work. And these lockdowns created a highly uncertain outlook for the labour market as well. And we see more and more that the labour market is going to a transformation.
You have also mentioned over a year ago that we need a country strategy for a digital view and for IT talents. Have we made any progress towards that?
Let me start firstly on the overall situation, what we see at the moment. We see something like a paradigm shift, driven by the Green Deal, by the behavior of people. We’re coming more from a linear economy to a circular economy, we’ll have news forms of energy, like green hydrogen. But also of course roles of work are increasingly under threat, become redundant. Just let me name a few: data entry clerks or administrative jobs or payroll clerks and accountant, assembly and factory workers. They have completely new threats now. And the country has now the chance to tackle new jobs which are coming into focus and also to develop further the country from falling at the Werkbank (workbench), what Romania is already doing – is already beyond falling at the Werkbank.
So we are on a good track. Romania has a potential. And when I arrived here two years ago I was higly impressed by the people, how they are working, how they are doing here, by the talents of this country. Romania has now the great opportunity exactly to go into the positions of growing demand like data analyst, scientist, artificial and machine learning specialist, data entry scientist, big data specialist, process automation specialist, digital marketing strategist. So just to name a few software applications. It’s of course now a great opportunity for the Romanian government and society to tackle these things with education systems responding to the future needs.
But this is of course also linked that we see more and more skills coming into focus, like analytical thinking and innovation, complex problem solving, critical thinking and analysis, leadership and social influence. There is an opportunity and challenge now for the country.
You have also mentioned before that Bucharest is a source of talents. What about the rest of the country and how difficult is for BASF to find workers, high qualified ones and low qualified workers?
Yes, Bucharest is certainly a big hub of business, it is the country hub. However, there are a lot of other cities playing a major role – and I’m thinking about Cluj, Iași, Timișoara, Brașov, Sibiu, just to mention a few. There are a lot of opportunities in these cities and they are doing their way, they are connecting themselves via airports, via different roads. That’s also something that we hope the country will be really fully connected with highways, that’s something quite important and we hope that this will be happening soon. But for example Cluj, if I’m not mistaken, was one of the cities in Europe with the highest GDP growth over a certain period. And this is visible. When you go to Cluj you feel the dynamic, you feel the young people, the universities are drivers. Even German students are going now to Cluj to study there so it becomes more and more famous. So there are a lot of great things here in Romania ongoing at the moment.
What digitalization projects do you have at BASF?
If you are looking into BASF, you have to look internally and externally. Internally, we started immediately with virtual conferences with customers, business brunches where we sent even brunch packages to the customers, but we were sitting virtually together with the customers. And of course mindset change of teams, of customers. We are also doing a lot of paper reduction, we are transforming a lot of paper signing processes into digital tools, like for example with Adobe Sign. We developed a lot of apps for different processes. A lot of things are happening in this respect, on local level, but also globally. If you’re looking into the customers, there are tools like Ultrasim, Ultratest, just to name a few for the automotive industry, where you can have online together with customers a tool to design a lightweight material. Also if you’re going into the agricultural field, where drones or systems like Xarvio are creating complete new opportunities for our customers and for us as a company. So in this respect, a lot of things are going internally and externally to facilitate digitalization of work, with colleagues, customers, value chains and external partners.
However, I have to say it is always good to meet face to face. The quality of a meeting can be, for sure, another one, and also the creativity. Thus, we are also encouraging again customer meetings and physical events and the customers very much appreciate it. The same is with the team coming together, creativity is higher and the quality of exchange is bigger.
I encourage everyone not to go only into the digital world, because we are social beings and we need to have contacts and emotions, and emotions can be much better transported when we are together.
I live under the impression that during this corona people forgot a bit their social skills, working together, what does this mean – to be together – and enjoy this and not to be afraid.
And with the vaccination we have now an excelent path to come out of this in order to come back also to our old world of physically working together, being together, supported by digital work.
We have of course an important side effect. We talk a lot about CO2 footprint. When we are travelling by plane or by car going to work, we are leaving a certain footprint. And with this we can reduce this footprint, however on the other side there will be always the need for travelling and coming together.
I would talk a little about Green Deal. How it would affect BASF’s business and the chemical industry as a whole? And what are your objectives?
Green Deal is a big political agenda and, from what I see, facilitated by the corona pandemic, because the financial means also became more visible. And the Green Deal is touching many aspects of our lives. There are many strategies for reducing the CO2 footprint, but the Green Deal will have an impact on how we live, on how we produce, on how we eat. A lot of things are affected by the Green Deal.
And BASF is fully supporting the Green Deal and the Green Deal objectives and we are fully in line with this and sustainability is playing an important role for us. So we are on the way to a circular economy. For example, at BASF we are working on projects like ChemCycling, where we are collecting plastic parts, bringing them into pyrolysis oil and bringing them back into our integration steam cracker. We want to have here more than 200.000 tons of these production possibilities in future.
Recently there was a big project announced, where BASF is working on the electrification of the industry. We are planning to build big wind farms now in the North Sea, one of the biggest offshore wind farms in the world, together with RWE. This means, just to give a picture, that the chemical side, which is huge, to be driven by windmills, and this is called electrification of the industries, it means creating via windmills, via renewables, green hydrogen for example, and this can then drive our plants.
Vattenfall is another one, when we have a certain share. And here we are doing a lot in the direction of the electrification of the industry.
However, we also can encourage the politicians here to support the industry. We had recently a workshop where a chemical company for Romania said that we need huge amounts of renewables and this would mean further windmills, we need transportation, the grid system forces.
But not only. Also when we look around Bucharest, we need solar parks and would be huge amounts of green energy, green hydrogen needed. Romania has an excelent position for this and we at AHK, also from my role as AHK president, we would like to focus everyone’s attention on this important topic that for the industry here in future in Romania, huge amounts of green energy are needed. It could be even a competitive advantage in the future in Romania, as there are fantastic areas in the Danube Delta.
As I was driving once from Constanța to the Danube Delta, there are some hilly mountains; all could be full of windmills. It’s starting already. But not only there, also the Carphatian Mountains. There is a lot of space in this country for solar parks.
So Romania could be a frontrunner in electrification of the industry. It’s a great opportunity now, with this also supporting the further direction of the industry development in this country.
This combined with good education, with innovation, with keeping the talents here – this is still a challenge.
And, coming back to your question at the beginning, yes, there is more and more of lack of workforce here unfortunately. And if I’m not mistaken, just over the weekend heard a number of 200.000 people are leaving year by year the country. This can not continue and it’s a pity for this country. And there are often not the worst people who are – if I may say this, these are the talents often. And we need to keep the talents here and give opportunities for the talents to live and work in this wonderful country.
So there are not many places in the world having such rich nature and for people this is also gaining more importance.
If the things are coming together – good education system, good health system – and them combined with a good perspective for innovative and good pay jobs, there are great opportunities.
Now we really need to take the opportunity and go forward with the significant resilience and recovery funds about to come.
And I can only encourage everyone to pull in one direction in order to come to a good solution for the future of Romania.
And now particularily with the Green Deal, it requires a complete new level of collaboration, of cooperation between politicians, society, economy, between all stakeholders in order to solve the big problems, tackle the challenges, but also tackle the great opportunities.
I would like to come back to the offshore wind topic. Romania also has a big potential in this area, as a lot of studies have shown. Would you say you would be interested in an investment or a collaboration to develop this potential?
At BASF we are here quite well positioned. We are feeling also daily the parts of the industry. So with our businesses coming from herbicides-fungicides, for example, for agriculture, then we go into the food area, going further into the areas of construction, into the area of automotive, home and personal care, chemicals, refineries. So basically we are doing a lot and we are exploring all different opportunities. And of course, supporting our customers and their development, exploring market posibilities together with our customers, market opportunities in the area of circularity, sustainability and of course, also exploring opportunities in new possibilities like wind farms. So we are exploring everything, but whether they will become project, I cannot judge on this.
You also have mentioned before that the future is about mobility. What is BASF doing in this field in Romania?
We are working basically with the entire automotive industry together. Just to give you a flavour, from around 60 billion euro turnover over the last year, around 12,5 billion are automotive related globally. And here also in Romania we have a three digit million number business overall. Also a huge portion of our business is related to automotive, to the tier-1, tier-2 and tier-3 producers.
But we have here also the OEM`s with Dacia and Ford. And we are collaborating excelently with both companies. Dacia is a good customer of us for different applications, ranging from coatings, going further to different plastics, catalysts and so on. It`s a good customer of us, collaborating in a broad areas of industries.
The same applies also for our AHK members, where a big portion of the German-Romanian business and members of our chamber are related to automotive industry. And they are working for the automotive industry in Europe and globally from here.
And also going more and more into innovations. And that is interesting to see; innovations like in Timișoara, like in Cluj, big names of the German automotive industry are investing into innovation hubs and innovations. And this can be certainly more facilitated with the good political framework, support by politicians and a good collaboration betweeen industry and politicians in order to make this move and having this vision that Romania becomes an innovative hub, where people are not moving away anymore, where people are coming back now. So this is something I would like to see here.
I’ve seen this recently when I was climbing in the mountains in Bulgaria, where I met some families and they said: „We are just back from Dortmund and we want to live here in Bulgaria, we see more opportunities now here in Bulgaria than in Germany, because things are developing here and we have also a great combination of nature, closeness to the nature and the living quality is quite good here… and we want to be with our families”.
So I really hope that I would meet also German tourists here on the Omu where I was over the weekend, that I would meet people who would say: „Yes, I’m back from Germany, I’m here now in Romania in order to make my life and my career”.
Because you mentioned innovation hubs, you recently announced an innovation project to support startups and innovative companies in Romania and other Central and Southern European countries. Can you say more about that?
For BASF, innovations are playing a key role for the future and we are tackling different opportunities and innitiatives and we engaged into innitiatives and innovations. We are supporting startups and we have one initiative that’s called „Innovation Hub”. That’s basically something like a competitition, we are rewarding innovating companies in Romania, but not only, also in a broader region, let`s call it a country cluster in South-Eastern Europe . So in this country cluster we want to find the most innovative, from our perspectives, companies. And we are inviting now the companies to take part in our Innovation Hub. Just to give a clear message: we are not talking only about chemistry, we are talking about all kinds of innovations that we want to focus on, digitalization, because digitalization is going into different approaches. BASF is now also working with supercomputers. We have a big supercomputer now in Ludwigshafen, where we are analysing new structures and creating new structures. So the future is there and we need innovations, we need startups, startups not only with an idea, also startups where we have the entrepreneurs, so to support these entrepreneurs, to give them some support to make their business dream become alive and that we see more UiPaths coming from Romania. And I have the feeling there are more.