How can companies mutually benefit from each other’s success? Why is paying for the performance of the chemical better than paying for the chemical itself? And how can the chemical leasing model enhance production by reducing the amount of chemicals?
Chemical leasing model does not mean leasing of chemicals
There is a deep conceptual difference between the chemical leasing business model and the leasing of chemicals. The first one is about performances, the second one about ownership. The first one focuses on chemical efficiency, the second one on chemical product materiality. The first one offers functions, the second one the chemical itself.
So, what is exactly the chemical leasing business model? Launched by the United Nations Industrial Development Organization (UNIDO) with the support of the Austrian government, it drives the chemical sector towards sustainability. It plays a key role in countries worldwide, such as Germany, Switzerland, Serbia, El Salvador, Uganda and Peru.
The commitment to the program of these countries "is translated in policies and strategies to enhance the spread out of the model," said Maria Grineva, communication consultant for environmental and industrial development projects, Athenea International in France. In UNIDO, Grineva added, "we have developed a performance-based business model. The main interest of chemical users is not owning the chemical or a certain amount of it. The interest is rather on how a specific chemical can be the best solution for a product or a process."
In the traditional leasing of chemicals — which can exist independently from UNIDO program — the payment is based on the volume of chemical landed. On the other hand, in the chemical leasing model the payment changes according to the performance that a specific chemical is supposed to deliver. For instance, if a company requires a lubricant for its conveyor belt, the payment unit could be the number of hours the conveyor belt works regularly. Besides, a company needs a degreaser for cleaning mechanical parts, the payment unit could be the number of pieces degreased properly.
The methodology is crucial. Any approach that is not systematic leads to unpredictable results and costs.
"It is a win to win scheme, both user and supplier gain," said Vojislavka Satric, international expert on chemical leasing and sustainable chemicals management in Serbia. "The supplier is pushed in developing new solutions to increase chemical efficiently, whereas the user benefits of the chemical performance and the supplier’s know-how."
Thus, besides promoting innovation, the UNIDO program succeeds in creating inclusive industrialization by enhancing networks between companies.
Performance, efficiency and choral work: The chemical leasing’s key words
Being part of the chemical leasing model means reciprocal trust. Companies must mutually trust each other and support choral work, as the economic partnership generally lasts years. To exploit chemical leasing at the maximum of its potentiality, UNIDO has developed a methodology for companies to follow. Briefly, the methodology pints out a series of steps highly recommended, such as company process, chemicals and costs analysis. Moreover, the company should set its priorities and select the most suitable processes and chemicals for the model’s implementation. Clearly, both user and supplier have to arrange and agree on the unit of payment, which has to be measured, recorded and demonstrated. As Vojislavka Satric underlined, "the methodology is crucial. Any approach that is not systematic leads to unpredictable results and costs." And, according to the many successful examples of chemical leasing application, that sentence could not be more true.
Fabricato S.A & Quimincol S.A.S, a Colombian textile company, for example reduced its chemical consumption of 63 percent. The Century Bottling Company LTD, an Uganda beverage company, could save around 25 percent of operating costs by adopting a dry lubricant. Furthermore, "the model is a strength also for the environment," said Grineva. "Thanks to the close collaboration between companies, chemical consumption is reduced. Indeed, not just suppliers are motivated to produce chemicals more and more efficient, but they also provide their know-how to the user, which means less wastes and danger both for the environment and the employees."
"The know-how is central," Satric said. "User companies need the chemical just for a part of their entire production process. Thus, they are not experts in the field. Chemical leasing overcome concretely the problem: selling chemical performance means also selling skills to use it."
Therefore, the chemical leasing strategy is certainly a winning model, which can be implemented for lowering chemical pollution and reaching sustainable goals. In addition, it pushes research through innovation by creating communication networks, and it devalues the concept of owning. Possession is no longer the key of success. Performance, efficiency and choral work are the new synonyms of success.