Syensqo CEO Amazed by China's Transformative Innovation｜Multinationals on China

10:14

SFC Correspondent Zheng Qingting, Intern Mu Rongxuan in Beijing

During an interview with SFC at the Summer Davos in Tianjin, where she served as co-chair, Syensqo CEO Ilham Kadri praised China's remarkable shift from imitation to innovation over the past three decades. Highlighting the country’s evolving role as a global hub for disruptive technologies, Kadri outlined Syensqo’s ambitious strategy to deepen its footprint in China while fostering partnerships with Chinese enterprises. The chemical industry leader emphasized that China's innovation capacity is not only reshaping its domestic market but also creating significant opportunities for global collaboration.

Syensqo, a specialty chemicals and materials company, has intensified its investments in China, including establishing a headquarters in Shanghai and appointing Dr. Chen Pu as Chief Asia Officer to lead its “China for China” strategy. Kadri noted the company’s focus on expanding production capacity to meet growing demand in sectors like electrification, lightweight materials, and biotechnology. “Our customers are asking us to be closer to them,” she said, underscoring Syensqo’s commitment to aligning with China’s sophisticated consumer base and industrial needs. The company’s collaborations with academia, such as Fudan University and East China University of Science and Technology, further strengthen its talent pipeline and innovation ecosystem.

Kadri also highlighted Syensqo’s role in supporting Chinese companies expanding abroad, particularly in Europe. “China has moved from imitation to innovation,” Kadri remarked, noting that Chinese firms are now being asked to onshore their disruptive technologies in Europe, a reversal from decades past when foreign investors brought technology to China. This shift, she said, presents a “big opportunity” for Syensqo to partner with Chinese companies.

Multinationals on China: In terms of Syensqo’s goals and strategy in China, can you share more details on the scale of your company’s current investments in China, including any recent expansions, such as production capacity increase at the Changshu site?

Kadri:We continue to invest in China. We recently established a head office and headquarters in Shanghai. About a year ago, we appointed a Chief Asia Officer, Dr. Chen Pu, who is now based in Shanghai and leads the strategy development for China and Asia as a whole. He reports directly to me, demonstrating that we now have executive leadership based in China. His responsibility is to build a “China for China” strategy, focusing on specific verticals and sectors. We are very pleased that we proactively started this initiative, as it represents the second evolution of our company’s presence in China.

Secondly, we continue to invest in production. You mentioned our compounding operations in China, and we are very satisfied with the investments we are making. Our customers are asking us to be closer to them, with growing demand in lightweight materials, electrification, compounding for healthcare, industrial needs, and biotechnology.

We also collaborate with companies and academia. Finding talent is critical for us—it’s all about talent, talent, talent. Collaborations with academia are essential for building our roadmap in mobility, whether in automotive or aviation. Additionally, we have a significant business in home care and personal care, serving sophisticated Chinese consumers. We work closely with our customers to meet these needs.

In the mid- to long-term, China will likely take the next step in building an efficient value chain, producing in China for China and for exports. I’m very confident about Chinese champion companies investing in other regions. For example, BYD and CATL may invest in Europe. Now, other regions are asking Chinese OEMs and industry players to share their disruptive technologies, as China has shifted from imitation to innovation over the past three decades.

Multinationals on China: This creates business opportunities for you, right? You’d like to be a partner for Chinese companies expanding abroad?

Kadri:Absolutely, spot on. That’s exactly the advantage we bring. We understand the regions, frameworks, and regulatory environments, which can differ significantly from those in China. We have established value chains and production capabilities in Europe, for example, in mobility, batteries, connectivity, and other applications. When Chinese OEMs establish operations in Europe, they need to build resilient, cost-effective value chains. Simply transporting goods or raw materials from China to Europe may not be sustainable in the long term. We offer specialty products that comply with European regulatory frameworks. We see this as a significant opportunity to support Chinese companies in establishing reliable, compliant, and cost-effective infrastructure in Europe.

Multinationals on China: Back to the Chinese market, what are Syensqo’s strategic priorities for its market layout in China? How do they align with China’s goals for high-quality development and a low-carbon economy?

Kadri:For the low-carbon economy, China has set a goal of carbon neutrality by 2060. This is because we began working on our “One Planet Strategy” in 2019. Importantly, we achieve sustainability and lower carbon emissions while remaining profitable—it’s not one or the other. In China, our operations run on 100% renewable electricity, and China’s significant investments in renewables benefit both us and the industry. Our solutions and materials help our customers become more sustainable by doing more with less, reducing waste, and creating more circular products. Currently, 16% of our sales come from circular products, up from single digits in 2019, and we aim to reach 18% soon. Sustainability is in our DNA, and we achieve it profitably in China, the world’s industrial hub, particularly in the chemical industry, where China leads in output.

China will continue to lead in establishing value chains, even as localization and onshoring occur in the United States and Europe. China and Asia have significant demand, and we rely on skilled, high-quality talent in China. Chinese consumers are increasingly sophisticated, seeking high-value, sustainable products. The youth in China are also more aware of environmental impacts, prioritizing lower environmental footprints and stability. We know what to expect in China. During events like Summer Davos, we engage with Chinese authorities and companies to discuss building resilient value chains and attracting more foreign investment. We are committed to protecting our investments in China and ask for the same in return.

Multinationals on China: I was about to ask about innovation. How does Syensqo plan to collaborate with Chinese enterprises to drive innovation in specialty chemicals and materials, especially in supporting China’s new productive forces?

Kadri:Innovation is our bread and butter. Each year, 20% of our sales come from products less than five years old, meaning we completely refresh our portfolio every five years. Innovation is critical. We established one of the largest global Research and Development centers in Shanghai. As CEO in 2019, I had the honor of launching our Magnolia Research and Development Center. Our capable team in China exports innovation globally, and our Shanghai R&D center is one of the most automated in the world, utilizing generative AI and innovating in materials for electrification, connectivity, and lightweight applications. Two months ago, during my visit to China, we signed an MOU with Sinopec to collaborate on thermoplastic composites, which are more circular than current composite materials.

We also engage with biotechnology startups and academia in China, including Fudan University and East China University of Science and Technology. These partnerships are vital for fostering the innovation of tomorrow. Syensqo is a science-driven company, and our separation from Solvay was about focusing on specialties. A specialty remains a specialty until it becomes a commodity, so we must continuously innovate and stay close to our customers, including in China. China is becoming more innovative and disruptive, serving as a source of insights and new ways of working that benefit both China and the global market.

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Reporter: Zheng Qingting, Intern Mu Rongxuan, Yang Yulai

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