Scott Watkins, Chief #Sustainability Officer at KISCO shares his multi-pivot journey from #PhD, researcher and then innovation exploiter in Australia to Chief Marketing Officer and recently, CSO at one of Korea’s major #chemical firms.
Along with his personal journey, Scott shares how chemical companies like KISCO have moved from the position they were 30 or 40 years ago, where chemical companies were seen as some of the worst polluters. Since then, multiple forces such as national and international regulations, as well as increasing customer demands have brought a real focus on the safety of chemicals that we use in industry every day.
Scott also reminds us of the scale of chemical industry underlies its importance. KISCO customers run from clothing and dye companies to electronic display companies and also to the semi-conductor industry as well. All reliant on companies like KISCO and their supply chains.
Supply chain fragility is an issue key to KISCO and Korea. KISCO’s response has been to deepen its chain. Scott explains; instead of purchasing a semi-finished product and then turning it into the final product, KISCO works out how to turn the raw material into the semi-finished product as well, or at least a few more of the steps.
Scott’s discussion with Alex helps us understand both the scale and the complexity of modern chemical companies.
Today’s episode is brought to you by Four Seasons Seoul. Stylish elegance in the very heart of the city.
Chemicals, vital to our modern lives, can they also be sustainable?
Alex Jensen: It’s Tuesday December 7th, you’re listening to Koreabizcast with the KBLA. I’m your host, Alex Jensen. And today we hand over to an unsung hero, a chemist helping to ensure sustainability in the supply chains we often don’t hear much about because they’re mostly below ground not necessarily literally, but I mean, so embedded in the final product that we don’t see them above the surface, we take them for granted. It’s the same with many of Korea’s leading industries chemists and chemical processes behind the scenes driving innovation more in a moment. First, let me say this episode’s brought to you by the Four Seasons Hotel Seoul, stylish elegance in the very heart of the city.
Alex Jensen: So, I guess when you hear about chemicals, especially when it comes to things like food or household products, immediately you might feel suspicious. But that’s from a consumer perspective. In the business world, it doesn’t need to be like that. In fact, it can be a very successful avenue of life as our next guest can attest. In fact, Scott Watkins is the Chief Sustainability Officer at KISCO here in Korea which stands for the Kyung-In Synthetic Company. Scott, thank you very much for joining us.
Scott Watkins: My pleasure, Alex, it’s great to speak with you.
Alex Jensen: As a way of introduction, is that a reaction you get sometimes or at least one that you sent behind the scenes? When people talk about chemicals, there is this inherent mistrust or suspicion about them?
Scott Watkins: Definitely. So, my background is a chemist, I worked for a long time in research, and I see things all around us where people demonize chemicals or advertise things is chemical free which is impossible. Everything is a chemical. And but I recognize that in many aspects of industry and life chemicals are seen as a problem or a danger. But actually, they’re the solution to all of the technologies that we use, and chemicals are used in every part of every manufacturing. And I think getting across the message that chemicals are what enable things and can be used in a safe way that doesn’t harm the users or the environment is part of my job with KISCO.
Alex Jensen: So, you’re interest in chemistry, did that start at school or was it something that blossomed in your teens or even later?
Scott Watkins: I was always interested in chemicals. I think early on, I probably looked at some other areas of science, but it was really at university that I really enjoyed chemistry and I stayed on, and I did a PhD in chemistry. So, I spent a lot of time studying chemistry and then a long time working in research in some startup companies and government labs. And yeah, just turning chemicals into products that we can use that make our lives better.
Alex Jensen: And you then made the step eventually to KISCO, what happened between university and taking more interest in in chemistry and the position that you’ve now held for seven years here in Korea?
Scott Watkins: Yeah, so I worked for as I just mentioned, a couple of startup companies in the UK where we were developing some of the chemicals that are used in what are now known as OLED displays. And so, they’re pretty ubiquitous in some of the really modern phones and watches and increasingly TVs now, so that was the very early days of OLED that I was involved in and then spent about 10 years back in Australia where I’m from, working mainly on the parallel technology, which is photovoltaic, so one displays putting electricity into some chemicals and giving out light photovoltaics or putting light in and giving out electricity. And so, we developed some chemicals and processes to make things like flexible solar panels. And I really enjoyed that research. I did that for about 10 years but increasingly my role with CSIRO, which is the Australian government laboratories was to look at how we could commercialize our research and answer how well inventions are technology solved problems for businesses. And so, in that role, I was talking to a lot more companies about, you know, what it looked like about investing in technology. And I decided that I was actually interested in that side of things, you know, how could a big company or a startup use technologies that were being developed by research providers and actually turn it into a product? And so, I decided to leave CSIRO just without a really clear idea and a long-term friend and colleague of mine who had become the CEO at KISCO, he is also a chemist. He’s someone I’d met while he was doing his PhD initially in the UK and then studying in Melbourne. And he said that he felt KISCO could benefit from somebody with my sort of experience. And so, he asked me to come over to Korea about seven years ago, probably almost to the day that we’re speaking actually. And I had a look around at all of KISCO’s factories and what we were doing. And so, I’d known Sung Yong for quite a long time by that point, and we had a very good relationship. And I decided to take on this role that was sort of newly created with KISCO. And it was really a fairly broad role initially, just helping all of our business units in developing new types of relationships outside of Korea but also listening to what other companies or customers want and finding ways where we could use our chemical knowledge to solve those problems and in turn potentially generate new business areas.
Alex Jensen: Yes, I should clarify you weren’t initially sustainability officer, but you came in the capacity you’ve just described. And what was it like for you to be in a company filled with Korean colleagues and you being the only one who both looks different, perhaps acts different talk certainly different and maybe has a very different working culture background?
Scott Watkins: Yeah. Look, they’re all of those things were true. And early on, I think I made a lot of mistakes. But my colleagues were very accommodating of me and very friendly towards me and really helped me learn a lot about a company, about Korea, and about the industries that that we work in. But yeah, I think when Sung Yong asked me to join KISCO, he recognized that we could benefit from the company could benefit from having someone with experience outside of Korea, and who could perhaps help KISCO more effectively communicate with people overseas because that’s a large part of our business, probably 70% of KISCO’s products now our exports outside of Korea, and we probably selling 60 different countries around the world. So, but I had to learn about all of the things I mentioned and working how I could contribute to improving things. But in general, it’s been a very fulfilling role because I’ve been able to largely solve problems or improve things or add value to processes as opposed to sort of having to sort of fight my way to solve everything. It’s been a very friendly process.
Alex Jensen: You talked about OLED before. It’s the darling of the technology in the TV world, as you also briefly mentioned, increasingly LG Display and LG Electronics really celebrating that form of television technology. And we see, as you also suggested on the smaller screens, the applications being used far and wide. But it’s the big electronics companies and display companies and whatever else you might find chemicals used in that get all the plaudits but the background, the chemical companies maybe unsung heroes, is that a fair description, do you think?
Scott Watkins: Yeah, those big consumer brands that you mentioned, have pretty deep supply chains where they rely on a whole range of companies like us to manufacture the chemicals that are put together in various stages to make the products that they use. And so, some of our products are directly used in those sorts of displays that you mentioned. But we also make products that help you to make the silicon chips that power the processes or to actually edge the displays that are used. So, the drawing the pixels on the backplane, for example. And so, there’s a myriad of chemicals that are used to make all that happen and how the connection with KISCO because our original business was diets for clothing. And that’s still our largest business areas are colors that you use to dye clothing. But actually, the chemicals that are used in them are chemically similar to what are used in some of these display technologies. It’s just they’re more pure and slightly functionalized to work in an OLED or an LCD display. But it was KISCO’s background in color that enabled us to grow some new business areas in electronics.
Alex Jensen: That’s really interesting that similar chemicals could apply to such different end uses. But it also draws me to this question again of demonizing chemicals. So, you will see for example, in the clothing industry, people talking about organic clothing as if it’s a very good thing, and perhaps talking about the dyes as being environmentally friendly. Can you talk us briefly through how that works from a chemical point of view?
Scott Watkins: Yeah, and that’s, that’s a huge area for us. And it’s partially why I took on this slightly newer role recently, which recognized something I’d already been doing for quite some time. So KISCO as a dye producer and very heavily invested in this in the fashion and textiles industry has long had a very strong commitment to compliance with various government and international regulations around supply chain transparency and sustainability of both materials and processes, I’m sure people around the world can think of images they’ve seen of dye factories in countries where the effluent from the factory goes into the river and the rivers colored or you know, and even the people or the animals that live near the factory are physically colored because of the waste from factories and either where the chemicals were produced or they were used. And that absolutely used to happen in the textiles industry did have a very bad reputation for the waste from those dyeing processes polluting the environment. And there were also issues about the chemicals themselves were some of the dyes that were used in various industries, particularly leather and denim use toxic chemicals. And there were things that weren’t very good for people to handle. But there has been probably, you know, this is a 20-year evolution for the textiles industry of recognizing those problems and a real focus on one the safety of the chemicals. So, the chemicals that are used now to produce the colors that we get in our clothes are absolutely safe and they’re purified to very high levels and monitored against various government standards. So, in Korea, our standards are very high. But there’s also, you know, other countries that are you the US have standards. But there’s also international associations that have formed out of groups of brands, or retailers, or semi government authorities that have come up to take on a regulatory role in the industry. And they’re setting standards as well around the purity of the materials. And then there’s also the process. So, the handling of the materials, how does the chemical come into the factory that’s making the clothing? How do the other worker’s exposed to anything that is dangerous to them? And how is that product dealt with at the end? So, it’s not, as I mentioned at the start, just put into the river at the end. So, there’s been a big focus. And you know, Greenpeace has been very active in this area and looking at wastewater from coming out of textile factories, clothing factories, making sure that the water that comes out is as clean as the upstream water. The KISCO has been very engaged in all of those sorts of initiatives over a long time but increasingly well, they’re always global initiatives and the complexity of those discussions is very high, it tends to all be in English and dealing with partners from all around the world. And so, my combination of being the native English speaker in the company being having a chemistry background, so being able to understand the technical part of it meant that I could take on this role of helping KISCO engage very strongly in these processes to share our advice about setting standards but also understand what changes we had to make to our products to ensure that we met those standards.
Alex Jensen: It’s interesting to hear you saying how high Korea’s standards are because it feels like every few years there’s another scandal of some kind, I remember years ago talking extensively in the media here about the humidifier disinfectant scandal for example, which affects a lot of people we’ve talked about semiconductor production as well, being very problematic or at least allegedly very problematic. And there is still a mistrust among consumers when it comes to where products come from, but would you say at this point, Korea made products or products that are imported to Korea that have gone through their checks and balances are pretty trustworthy then.
Scott Watkins: Absolutely, you know, I obviously I come with some bias, but I can say with all truthfulness that the products that we sell on supplier are extremely safe and are done manufactured and supplied and used in a way that is very safe and sustainable. The customers the end users whether they’re brands or retailers who we mainly deal with are very sensitive to making sure that their supply chains in the fashion industry are very compliant and will regulate it and there is an element of marketing from these brands and retailers in it, they want to be seen to be green but they are authentic in they are genuinely trying to do things better, you know, there’s a whole another issue about the best thing they could do is actually reduce consumption. But you know, that’s on everybody all of us do we need so many clothes, that that sort of thing. But as far as the clothes that we are manufacturing are made, they the chemicals that they’re made with, that we produce in Korea and to your specific point about Korea’s regulations. They’re very high the equal of any country around the world. Then the investments that we’re constantly making into our factories to ensure the quality of the products but also look after everything that to do with our emissions. So to make sure that our water that we dispose of our atmospheric emissions and making sure that any chemicals that we that come out of, you know, chimneys in the factories that scrubbed dealt with before being emitted, the investment and those very high like literally millions of dollars KISCO spends on these things every year to ensure that nothing comes out of our factories in any way could harm the environment or the people around them.
Alex Jensen: Yet every now and then, as well, apart from the consumer goods, you also hear of chemical explosions in Korea. And I’m not saying that any of that has anything to do with KISCO. I want to make that very clear. But things do go wrong, occasionally. Do you feel more needs to be done on the sustainability or safety front to prevent that from happening or is it just always going to be a danger with manmade processes?
Scott Watkins: I mean, chemistry is inherently a dangerous process. And some of the chemicals that we use, there’s a lot of energy involved and whether companies, you know, can sometimes reactions can go wrong. I think the best thing that companies can do is to try and have many failsafe mechanisms in place to ensure that they’re not large. And, you know, to my knowledge, show that there have been some accidents in Korea and other countries, you know, things happen from time to time, but I don’t think we see the catastrophic explosions that may be going back, you know, 30, 40 years ago, you might have seen from chemistry plants, I think chemical engineers nowadays in developed countries are able to engineer plants such that if something goes wrong, it can be relatively well contained. Of course, the goal is always zero, you know, every chemical factory that I’ve ever visited, everything that I’ve ever been involved with the goal is zero accidents, zero harm to any of our staff. And safety is a very, very high priority for every chemical company. But it’s just a reality. We deal with highly energetic processes sometimes huge volumes of sometimes very reactive chemicals. And, you know, there is always a chance that something can go wrong but it’s about putting in place as many controls as possible to mitigate that risk as much as possible.
Alex Jensen: Another danger or risk is more on the supply chain front that we touched on before when we spoke of all the unsung heroes. How diverse is your supply chain? For example, did you feel that there’s one particular company or country for that matter that dominates?
Scott Watkins: Yeah, look, we do probably in common with the whole world have significant reliance on China for some of our raw materials. But what KISCO has done and COVID has accelerated this in a few areas is we’re constantly looking at our processes to see, you know, does it make sense for us to go deeper into our own supply chains. And for example, we’re because we’re a chemical company, you might have a process of making a chemical that might have 10 steps. And maybe we at the moment do five of them. And we you know, we buy the product, first 5 are done by one of our suppliers, it may be that we make a choice to go a little bit deeper. So, we start doing 7 or 8 steps. And so, we go a little bit deeper down the supply chain. And we’ve certainly had those conversations around COVID where that’s highlighted some of the fragility of supply chains. You know, it is complex because sometimes you make those decisions, and you know, we can’t necessarily do it as cheaply or as efficiently as our supplier can do it. And so, it is a business decision. But I think that’s for our supply chains. And, you know, we’re constantly re valuing that we have had in this this extended earlier than COVID where some of the disputes between Korea and Japan around the supply of semiconductor materials from Japan to Korea did accelerate our investment in onshoring, some of the chemicals that are used for semiconductor manufacturing and so there were there were things that probably traditionally Korea had been importing 100% of from Japan but when they became a little bit more difficult due to that the tensions, we were able to take on board and manufacture them in Korea and thus strengthening that that sort of indigenous capability within Korea to reduce that. So, the broad and through that supply chains are always things that we’re looking at and trying to understand. Can we have more control or more, more security over and I think that comes from being a chemical manufacturer ourselves. In theory, we could make everything we need. But sometimes we just have to draw a line where it’s not cost effective for us to go too far back.
Alex Jensen: I wanted to go a little deeper into this whole question of semiconductors and flat panels, for example, that South Korea was hit by with the Japan dispute, why does it take so long for South Korea to develop its indigenous technology in that respect? And this is slightly different to the recent conversations we’ve been having about the urea supply chains because that was, I guess, just the case, it was a lot cheaper to make abroad. But with some of these chemicals, it’s more about expertise and the fact that Japan has it in South Korea doesn’t?
Scott Watkins: Yeah, that’s the broad answer. The quick answer to that question. You know, there’s literally 1000s of chemicals that are used in collectively, these electronics processes and Korean manufacturers, huge numbers of them. So, it’s not a case of Korea’s chemical industry or electronics industry being not capable or incompetent in any way. There’s literally 1000s of manufacturing Korea and Korea’s chemical Industries is one of the biggest in the world, you know, some of Korea’s big chemical companies are massive players globally. But the fact is, there are some chemicals, and some of them are quite crucial where the expertise and the ability to manufacture them did lie solely outside of Korea. And so, when there were some tensions and restrictions on some of them, it did expose some problems in the supply chains. But overall, there is a great deal of security in Korea’s supply of these chemicals. It’s just that there every now and again some pop up where there is some insecurity. And now the government’s supported companies like us to try and develop that capability to reduce the number of, I guess the number of holes in the armory. But I think focusing on the problems might gloss over the fact that there is a huge capability in Korea and a very large number that are already manufactured locally.
Alex Jensen: When you try to solve a problem though like that, and again I’m totally appreciate what you’re saying and applauded as well. But just to understand the process better, is it isn’t about numbers of people all working together and by virtue of numbers, someone figures it out or is it about a smaller number of people having models that allow them to test more efficiently or more elaborately the chemical reactions for people who are not scientists? Can you try to explain that process for us?
Scott Watkins: I mean, there’s probably a bit of both of those things in, it sometimes it takes, you know, who has the expertise to make something, but I would also add another is sometimes just historical and I’ll give a specific example where for us and we’re Korea benefits from it. So, one of our subsidiary companies JMC makes saccharin the sweetener. Now we have a very large plant that makes that that saccharin in Korea and that’s probably 60 years old now. And it’s we were one of the largest suppliers in the world. Now, as a result of having that plant, we can make a whole lot of chemicals like saccharin. Now, does the investment needed to build a new saccharin plant today in any country is huge. And the price of saccharin is so low that you wouldn’t really choose to build that, that plants now. So therefore, if another country came up with a problem around saccharin supply would be a big investment for them to build that plant. And that’s sort of what’s happened sometimes with some of these very specific materials and electronics where it’s not for a one with expertise or want to have a lack of wanting to do it in Korea, it’s just that there’s not a factory that makes that particular chemical or does that particular reaction here in Korea. And the cost of setting up that factory or process is very high relative to the demand for it, or the need for it from a strategic point of view. But when the world changes and supply chains get disrupted that value proposition changes, and suddenly it becomes more cost effective or more important to build that capability. So yeah, so I would say, expertise and understanding is one thing, but it’s a bit historical just the fact that you’ve carried out that particular reaction to deliver that particular type of chemical. That’s probably actually the biggest impediment so it’s just a lack of the capacity to do it here because it hasn’t been done before and hasn’t been needed.
Alex Jensen: On the whole idea of expertise and building innovation, though. How much more potential is there in your world? Do you feel, for example, that it’s going to be out of your world that the world is going to the broader world that is going to find the big answers to problems related to sustainability, like clean energy for example, and not relying on certain challenging materials for electric vehicles, for example?
Scott Watkins: Yeah, look, I’m very bullish on that. I think chemistry solves everything. And you know, there’s a very wide variety of materials that we have not even dreamed of yet, that could transform some of the technologies that we want to take us forward. So, when you look at Battery technology, for example, there’s all different types of electrode and electrolyte combinations that are constantly being developed. And I’m very optimistic that some of them will make even greater progress on what’s been done to date and that may change some of those needs around supply chains of particular, you know, metals, for example, that are needed. The area that I spoke about very early on about photovoltaics that I spent a long time working in that, you know, most of our solar panels now are made from silicon. But there’s this emerging area of thin film photovoltaics made from carbon-based materials so organic photovoltaics. And the efficiencies that people are getting now are getting up to comparable levels with silicone, but they, you can instead of having big, heavy thick panels on your roof, you could start thinking about applying very thin coatings to windows of buildings or applying them to the surfaces of houses or the sides of buildings. And so rather than just having a few panels generating the whole fabric of a city becomes the generator electricity. And all that stuff is made possible by new types of chemicals that that can be done, can be made. And even if I take East Coast core business around dyes, when I joined KISCO, you know, dyes, I assume this was something that was sort of sorted in the 1800s, you know, people made dyes a long time ago, and but this huge innovation happening in in dyes, you know, we were constantly wanting brighter colors, deeper blacks, things that don’t fade when you sweat or expose them to the sun. And also, chemicals that we can deposit without having to wash them many times so to do them in a more sustainable way. The rise of printing in textiles industry is huge, where instead of dyeing big rolls of cotton or polyester and washing off all the excess with water, we’re using digital printers to print the dye just where we need it. And so, there’s no water used in the process at all. And so that’s completely changing the landscape of textiles manufacturing. But all of those things need new chemicals either the inherent chemicals themselves that dies at the semiconductor materials or formulations in the form of the inks to be able to print them at the scale and speed and precision that you need.
Alex Jensen: Really interesting to get these insights. The Scott Watkins or Dr. Scott Watkins, I might say off KISCO. Thank you so much for speaking with us.
Scott Watkins: Yeah, thank you very much, Alex.
Alex Jensen: Well, hope that’s better explain this idea of chemists behind the scenes driving so many of the innovations we get to enjoy both at consumer and face to face consumer business level. You can find out so many more stories if you check out our archive which is already more than 50 episodes deep. Thank you to everyone who’s appeared on Koreabizcast over the last few weeks, search Koreabizcast through your preferred podcast provider to go through them. And you can find us on LinkedIn by searching KBLA, one more thing to say is thank you very much to our sponsor bringing today’s episode to us the Four Seasons Hotel Seoul, stylish elegance in the very heart of the city. See you again tomorrow.