Trevor Russell on changes & challenges

The first year has gone well, I have to say, and it has passed very quickly. We've operated very safely and very well: we've developed leading edge products, attracted some excellent new people, and continued to invest in developing our people across all levels in our organisation, including the executive team. We have had good feedback from our customers on our capability to develop industry-leading products and on our leadership in supply reliability.

By doing all of the above, we have been able to justify continued investment in technology capability and continued investment in assets to further strengthen our supply reputation. So, all in all, with customers, colleagues and shareholders giving us good feedback, I have to say the last year has been successful thanks to a lot of hard work by very many people within the organisation.

However, nothing is ever perfect. We have a strong learning culture within Infineum, and we focus on appraising our achievements and our shortcomings, and we continuously learn from our mistakes in order to improve.

This is a very simple one to answer. I've lost count of the number of speeches and articles where I have said that our focus is first and foremost on the ‘business fundamentals’. These fundamentals are: personal safety, process safety, business ethics, regulatory and legal compliance, business controls, environment performance, and adherence to policies and procedures.

Our performance in these areas has been strong historically, and we have to keep it that way if we are to retain the respect and support of our customers, our suppliers, our shareholders and our colleagues.

Once these business fundamentals are well controlled, we can then focus on the fun parts of doing business. In our case, this means strengthening our value proposition through investment in technology leadership, underpinned by industry-leading supply reliability.

We spend an extraordinary amount in our Technology function to deliver leading-edge products for our customers. In recent years, this amount has increased in two areas. Firstly, to cope with the concurrent industry specification changes around API CK-4 and FA-4, ILSAC GF-6 and ACEA 2016 and secondly, we have earmarked specific funds to deliver breakthrough innovations. In both areas we have seen, or are seeing, real payback on our investment.

On supply reliability, we take a hugely disciplined approach to identifying the strengths and weaknesses in our supply chains. Based on this assessment, we invest in plant, equipment, working capital, processes, systems and people to retain leadership, to shore up any weaknesses, and to make our supply performance as good as it can be for our customers.

So, a long answer, but we focus on the business fundamentals and then, from that secure base, we have a disciplined approach to investing in our value drivers, namely technology leadership and supply reliability.

Change is all around us, and it helps me to think about the different timeframes in which changes might play out.

Shorter term, we have the usual business challenges ahead of us. We have to face these challenges and take actions in accordance with our competitive advantage, our strengths and our improvement areas, against a backdrop of an increasingly competitive marketplace. Specifically, we are currently facing escalating costs of performance testing, movements in crude and raw material costs, customers keen to improve their profitability, and competitors changing their footprints and market aspirations.

Faced with these short term challenges, our focus on business fundamentals and investments in Technology and Supply is unlikely to change. We will have a constancy of purpose around these critical value drivers.

Longer term, however, the concern shifts to what will be driving our industry in years to come. Such drivers might be vehicle electrification, changes in personal mobility, vehicle ownership, governmental intervention, internal combustion engine advances, global demographics, and digitisation. Infineum is currently reviewing these topics and their impact on our future business. We are building potential scenarios and devising our potential actions within these scenarios.

We will be sharing our thinking with key customers and suppliers as we progress the work. Depending on where this work leads us, our focus could change, and likely will. But it is too early to be more specific at this stage.

I've now reached a career stage where personal ambition has been replaced by ambition for the company and for the people within it.

My concern now is about legacy and doing the right things within the industry, for our company and for the colleagues who will still be in this business for years to come.

For the day-to-day and short term issues, I trade on 30+ years of experience to guide, mentor and encourage the organisation.

Beyond that, I am very closely involved in the long-term strategic work and will be looking to add value wherever I can in the assessment of future scenarios and the building of strong potential responses.

For me, maintaining strong corporate performance in the short/medium term while laying out our future direction is what it's all about. Within that, developing the next generation of leaders to drive future performance is also mission-critical.

It should be fun over the next few years!