Building strong relationships, defining solutions - Ansac president Douville

By IM Staff
Published: Friday, 01 November 2019

From the withdrawal of one of its core members to the implementation of a new fuel surcharge on exports, the last year has been an eventful one for Ansac - the world’s largest exporter of natural soda ash. But as president Chris Douville tells Ross Davies, the challenge of running the corporation continues to be a rewarding experience.

Interview1
Chris Douville has been president of Ansac since 2013.
Ansac

"I can’t promise any self-psychoanalysis," Chris Douville says in response to a request to interview him about his role as president of American Natural Soda Ash Corp (Ansac), the world’s largest exporter of natural soda ash.

Speaking to Douville, it becomes immediately apparent that he is a company man, much more comfortable discussing the achievements of Ansac - of which he has been president since 2013 - than engaging in any kind of hubris.

"The main sources of inspiration over my life and career have been the desire to build strong people relationships that can work together to define and implement solutions for both day-to-day and long-term challenges," he says. 

Douville has every reason to be proud of his time thus far at the helm of Westport, Connecticut-headquartered Ansac. 

Over the past six years, the organization - which operates as the sales, marketing and logistics arm of the three leading producers of natural soda ash in the United States - has performed strongly.

"Our teams have achieved a number of records," he says. "These include highest annual volumes produced, reduced numbers of recordable injuries, highest sales volumes, and highest profit returns."

Ansac's triumvirate of members is comprised of Genesis Alkali, Tata Chemicals and Ciner Resources. 

Genesis is a home-grown US company headquartered in Green River, Wyoming, while Tata Chemicals is a US subsidiary of Indian conglomerate Tata Group, and Ciner Resources is the North American arm of Turkey’s Ciner Group.

By the close of this year, Ansac is forecast to have exported well over 4.5 million tonnes of sodium carbonate, most of which will wind up in end products as diverse as glass, detergent, chemicals and lithium batteries across the world.

Despite his insistence on mostly talking shop, Douville does offer a glimpse of his personal achievements and ambitions. 

An early affinity with science and math led him to complete a degree in chemical engineering at the University of Notre Dame, Indiana, in the mid-1980s, after which he gained an MBA from Southern New Hampshire University.

When not presiding over a North American chemicals empire, Douville winds down by spending time with friends and family, including a new grandson.

The consummate corporate professional, golf is high on his list of hobbies, as is road cycling - an increasingly important networking activity for high-flying business executives. 

But keeping fit is important to him for its own sake, as is watching Notre Dame Fighting Irish - the famous college football team of his alma mater. 

Douville’s belief in self betterment, both mental and physical, also shines through in his enthusiasm for corporate social responsibility. 

Since he took the helm at Ansac, the corporation has worked closely with the Connecticut Food Bank, a local non-profit organisation and the largest source of emergency sustenance in the state. 

"I am proud of the work we have done in the community to help reduce food insecurity for kids and their families," he says. 

"Since 2013, we have also been partners with a local [non-governmental organization] in Indonesia. In that time, we have helped to build six new schools, providing safe, positive learning environments across the country," he adds.

Chemical romance

Unlike many chemical engineering graduates who are lured away from chemistry by the promise of big bucks in finance, Douville stuck to his academic interests and decided
to pursue a career within the chemicals industry. 

Prior to joining Ansac, he was Tata Chemicals’ vice president of sales and marketing from 2000 to 2008, before becoming general manager of the group’s North American natural soda ash operations. 

From a personnel perspective, Ansac is compact in size, employing just 30 people across its global business, which includes regional sales offices in Miami, Hong Kong and Singapore. 

"This means communication, passion and innovative ideas to resolve challenges are critical to our success," says Douville. 

"Ansac’s value proposition is built on providing our customers with the highest quality soda ash and always reliable on-time deliveries to all of the geographies we serve."

"Our ability to achieve those are due to the four cost-efficient, large-scale, high-quality natural soda ash production operations of our member companies, as well as the shipping and local inventory capabilities of our supply channel partners and distributors," he explains. 

Douville’s drive and love for his role comes from what he calls "strategic goal achievement".

"My priorities as a senior manager are to ensure that we have the worldwide data necessary to define the short and long-term strategic goals of our business, that we have buy-in from our board and our various teams, and the internal and external resources necessary to achieve those goals," he says.

Changes at Ansac

The past 12 months have been eventful for Ansac, which turned 35 this year. 

In November 2018, Ciner Resources announced its withdrawal from the corporation, effective as of December 31, 2020. 

While this decision sent ripples through the global soda ash market and raised questions about the sustainability of Ansac as a marketing organ for North American soda ash, Douville dismisses the idea that Genesis or Tata might follow Ciner any time soon. 

"Neither have indicated an intention to provide termination notice prior to year-end, and each has been supportive of Ansac’s strategic business initiatives that will extend beyond calendar year 2021," he says.

If notice were to be provided by another member by the end of 2019, the earliest termination date possible for that member would be the close of business on December 31, 2021, which means Ansac’s future is secure for at least the next two years.

Another area requiring Ansac’s attention is the imminent introduction of the International Maritime Organization’s (IMO) sulfur cap, which requires all shippers to limit their sulfur fuel content down to 0.5% from the current 3.5%. 

Ansac has said it welcomes the mandate, which comes into effect on January 1, 2020.

According to Douville, the corporation has long been sensitive to its environmental obligations, as evidenced by a third-party LifeCycle Analysis report from 2015, which indicated that the carbon intensity footprint of soda ash produced in Green River, Wyoming - the location of the four plants belonging to its member companies - is 37% lower than that of the synthetic processes more common in China and parts of Europe. 

"In 2012, Ansac also committed to only bringing new fuel-efficient eco ships into its leased time charter fleet," says Douville. "These eco ships provide a 15-25% carbon footprint reduction depending on type of engine and engine speed."  

That said, the corporation believes the new IMO regulations will have a significant effect  on fuel hedging options for next year. For this reason, in mid-September, Ansac announced it would be implementing a fuel surcharge, with immediate effect, to ensure compliance with the new regulations.

"The reason that we announced the fuel surcharge is two-fold," explains Douville. "While there are only a couple of months until the implementation of the IMO mandate the cost to purchase the 0.5% low-sulfur fuel is still highly speculative, with a significant premium included in forward pricing, limiting other realistic hedging opportunities currently available.  

"Second, with the number of different methods that fuel refineries and blenders will use to achieve the mandate, shipowners are still evaluating which fuels they will purchase. Therefore, there is a large uncertainty around the supply and demand, as well as cost for the actual fuels."

As shipowners largely pass along additional fuel costs to those using the freight services, Ansac has initiated the surcharge "to pass through this additional mandated cost".

"We believe that neither Ansac nor our customers should fully absorb this globally mandated cost increase," insists Douville. "The cost increase should ultimately pass through the entire supply channel to the end-use consumer."

Outlook for soda ash

As for the sodium carbonate market, more than 50% of demand is now reported to come from the glass industry. 

Appetite for flat glass, in particular, remains strong, says Douville, driven by increasing urbanization in Ansac’s key markets of China, Southeast Asia and Latin America. 

"More recently, the growing interest in renewable energy has also increased demand for solar glass," says Douville. 

"Demand for lithium carbonate and lithium hydroxide is providing upside growth potential in electric automobiles and electricity storage. The move away from plastics and plastic containers to reduce global waste may also provide increased opportunities for fully recyclable container glass," he adds.

According to Ansac’s website, the Green River Basin has enough trona ore - the natural mineral that is refined into soda ash - to supply the world’s soda ash needs for hundreds of years. 

Despite this, supply is currently tight.

Genesis Alkali and Tata Chemicals were forced to increase prices in August, in the range of $10-15 per tonne, due to increased energy costs incurred in the production process. 

"Historically, the global supply-demand balance for soda ash and the largely corresponding capacity utilization rate for soda ash producers are what drive contract and spot prices," explains Douville. 

"With soda ash demand projected to increase by a minimum of 1.5-2.5% per year over the coming years, this will equate to an additional 900,000-1.5 million tonnes of demand growth each year," he says, reciting what sound like well-rehearsed calculations.

"With very few producers indicating capacity increases over the next couple of years, global supply-demand balance should tighten and capacity utilization rates will increase."