Gulf Petrochemical Industries Company

2008 Robert W. Campbell Award Recipient
Category II

EXECUTIVE SUMMARY

Holism as Aristotle summarized in “Metaphysics” is “The whole is more than the sum of its parts.” Combinations go on to form further, more complex, combinations.  This is where integration can generate beneficial combinations as we see in nature Sodium and Chlorine two dangerous chemicals yet when combined is an essential part of man´s diet.  People can choose with whom they wish to associate, to what extent and for what purpose. Experience has shown that people who come together for a purpose will often produce ideas and select a course of action very different from the ideas held by anyone individual before meeting.  This is how Gulf Petrochemical Industries Company (GPIC) exists and has developed into a successful company in a holistic way.

Good business today depends on investing in Safety, Health and the Environment (SH&E).  At GPIC a small petrochemical plant emerging in the Middle East in the Kingdom of Bahrain the leadership recognizes that investment in SH&E is an essential part of the mix of a successful company.  GPIC´s endeavor for Holistic Excellence has resulted in a very successful company that has a highly motivated workforce, an ever-increasing customer base, mounting profits and enhancing reputation.  By the insistence of setting high standards for SH&E and quality issues this has resulted in the company winning global recognition which has resulted in many prestigious awards in various fields including SH&E.  This limelight has pushed the company to become a trendsetter in the Gulf region in promoting the benefits of SH&E principles. 

All of this was started before 1988 which was the year the company received its first safety award, a National Safety Council Award of Merit from the USA.  It is also an incredible achievement when considering the backdrop to all this, two Gulf wars and constant upheaval within the region.  This case study shows the path GPIC has taken from being the first Arabian Gulf Cooperation Council´s (GCC) venture into establishing a petrochemical industry in the Kingdom of Bahrain.  The business of GPIC is to produce and market high volumes of best quality Ammonia, Methanol and Granular Urea using Natural Gas.  The study follows the recent history of GPIC looking at landmark achievements and is aimed at showing the “One Team Spirit” that exists in the company which is one of its most potent attributes of its dynamic mix. 

In 2005 the company generated a record turnover of US$234,191,000 and aggregate net profit of US$128,257,000.  By the end of 2005 GPIC had performed exceptionally well in all areas of activities and was recognized internationally as a role model for SH&E.  Amongst the awards that company received that year was the prestigious international award “Sir George Earle Trophy” from the Royal Society for the Prevention of Accidents (RoSPA), UK.

In 2006 the company continued to grow in stature and achievements, setting new records in terms of profitability and operational reliability.  The cumulative total production in 2006 was 222,222,222 tonnes.  GPIC has shown great vitality, a culture of excellence and a continued appetite for achievement (no, resting on its laurels). In 2007 the company grossed over $201,000,000 which equates to 24% rise in net profits.  The company is planning future expansions and diversifications and the company firmly believes a commitment to SH&E is the key to opening these new doorways.

The case study highlights the development of GPIC by looking at where it is today with fully implemented SH&E Management Systems and now the company is integrating the SH&E Management systems as part of the “Holistic approach to SH&E i.e. the whole is greater than the sum of the parts.  The company´s success shows that, leaders at the top of the company have played a leading and active role in all SH&E commitments, further demonstrating the “one team spirit”.  The leadership recognizes that it is equally important to put the SH&E message over to the families of employees, both young and old.  Moreover, the case study shows the determination of the company to encourage the local community, the country and further a field to embrace SH&E issues and to develop laws and regulations which benefit people, helping them to make the most of their lives in a safety conscious environment.

The management leadership within GPIC has always been designed to ensure speedy bottom to top and top to bottom communication.  Hence the organizational structure is reasonably flat. The General Manager (GM) and the Deputy General Manager (DGM) are aware of the day to day operations within the process areas.  The DGM is the chairman of the SH&E Committee which meets each month.  Although the GM and DGM like to be “hands on” they do give a great deal of autonomy to their managers.

The events of 2007 are also highlighted, GPIC set it self very large challenges and all were achieved including introduction of Enterprise Resource Planning (ERP) system using SAP.  The Quality Managements Systems ISO 9000, OHSAS18001 and ISO14001 were fully integrated and qualified under Publicly Available Specification - PAS 99.  Enterprise Risk Management (ERM) was also established and the business risks assessed.  All this activities were a prelude to the largest Turnaround in GPIC´s history; it was most expensive, required the highest number major equipment replacement and refurbishment, it record the highest number of man hours, yet the lowest number of accidents and incidents were reported.

There is a real conviction within the company that its success is firmly linked to its commitment to Safety, Health and Environmental care and the “one team spirit”.  GPIC´s bottom line is that investment in SH&E creates employee confidence, which is reflected in the operational excellence of the company. This has resulted in a customer base that desires quality, reliability and complete confidence in its suppliers.  The Board of Directors and Senior Management Team resolutely believe in “It is not what SH&E costs, it is what SH&E SAVES.”

BUSINESS PROFILE

The Gulf Petrochemical Industries Company (GPIC) is the first Arabian (Persian) Gulf Cooperation Council´s (GCC) venture into establishing petrochemical industry in the Kingdom of Bahrain.  Utilizing Bahrain´s Natural Gas resources the company produces Ammonia, Methanol and Granulated Urea.  GPIC´s Sectors Categories are the Manufacture of Fertilizer and Nitrogen Compounds and Manufacture of Basic Chemicals except Fertilizers and Nitrogen Compounds Reference to the United Nations International Standard of Industrial Classification (ISIC) Codes: 2412/2411 respectively.

The company was established in December 1979 and commenced production in 1985.  Three parties equally own GPIC.  The Saudi Basic Industries Corporation (SABIC), representing the Government of the Kingdom of Saudi Arabia, the Petrochemical Industries Company (PIC), representing the Government of Kuwait and the National Oil and Gas Authority (NOGA), representing the Government of the Kingdom of Bahrain.

There are three production facilities which have been built on reclaimed land from the sea, on an artificial island that is 600 meters wide and 1000 meters long.  The complex also houses all utilities facilities, engineering, maintenance and administrative buildings.  An on site Gas Turbine Generator supplies the Ammonia and Methanol production plant´s power.  The local electrical utilities company supplies the Urea facility.  The production capacity is 1200 tons per day Ammonia; 1200 tons per day Methanol and 1700 tons per day Granulated Urea.  In 2007 the cumulative total production reached 1.4 million metric tones 1.9% above planned production.

The complex is connected to a Urea export facility through a 3-kilometer long conveyor belt system that exports granulated Urea to the international markets. Ammonia and Methanol are exported through another export facility, which is owned and operated by Bahrain Petroleum Company (BAPCO).  GPIC is considered the largest exporter of products in the Kingdom of Bahrain. 

GPIC markets most of its product to the international markets including the United States, Australia, China; New Zealand; India; Korea and Europe.  In 2007 GPIC the company grossed over $201,000,000 which equates to 24% rise in net profits.  A major contributing factor considered by all at GPIC, to be significant in this success is excellent Safety, Health and Environmental management.

The company currently employs 522 employees and utilizes the services of about 200 to 300 contractor personal during normal working conditions.  These figures were greatly increased during November 2007.  In which the largest Turnaround in GPIC´s history took place and the workforce was expanded by an additional 3000 contractors.  The company enjoys and encourages very good Management relations with the Labor Union and was in fact the first company in Bahrain to allow the establishment and recognize a Workers Labor Union.