VIO Chemicals CEO explains how to stay competitive despite the stringent environmental regulation in China

Zurich, Switzerland: – Dimitris Kalias, CEO of Swiss chemical company VIO Chemicals, at an interview with CHEManager International, discusses the impact of China’s tighter implementation of environmental regulation on the market competitiveness of chemical and pharmaceutical companies with local production, and presents ways to remain competitive and secure an uninterrupted supply for your customers.

Chemical and pharmaceutical supply chains face high risk

Since late 2016, the Chinese government has drastically tightened up regulations amid rising concern about environmental pollution and safety, conducting a series of sudden inspections of production companies. This has prompted chemical and pharmaceutical producers in China to examine direct and indirect consequences, such as disrupted production, relocation to industrial parks or sector consolidation.

Complexity, regional fragmentation and uncertainty

While regulations governing environmental protection tighten up, the provincial fragmentation and lack of strong policy support present great challenges for small and medium-sized chemical producers and their supply chains. The degree of strictness in the enforcement of the regulations can be different from province to province, depending on the management style of each chemical zone’s administration and local government. In addition, guidelines about monitoring of pollutants and tax collection are still under discussion, adding uncertainty to an already fragmented regulatory landscape.

Licensing delays

Dr. Kalias says small and medium-sized companies are finding it very difficult to stay abreast of current regulatory changes and meet public audit requirements. As a result, they face long years of delays to get production licenses for new products or fail to get a license at all. Small companies are even sometimes forced by the local authorities to merge with their neighboring manufacturing peers, e.g. pharma intermediate producers with agrochemical companies, without any economic criteria in consideration, only because their land is too small. Others just shut down.

Full automation can be costly

The full impact, according to Dr. Kalias, has yet to be felt with growing pressure for installation of full automation systems as process control mechanisms, invariably associated with IT infrastructure and purchase of ERP, PLC, DCS and other software. And although it may not be mandatory to have every system installed – it usually depends on the size of the factory and production pipelines – it is almost certain that conforming to process control standards can be very costly.

Rigorous auditing for continuous supply of materials is critical

“Customers expect an uninterrupted supply. At VIO Chemicals, we screen and assess our suppliers not only for environmental but also for quality, safety and regulatory compliance”, Dr. Kalias says. “We perform our own internal audits to gain a greater level of comfort prior to public control. Proactivity, anticipation, a strong local team and high investments in pollutants monitoring technology and process control solutions are fundamental to our competitiveness and reliability as a CDMO,” Dr. Kalias says.

VIO Chemicals is a Swiss chemical company with core competencies in custom design, development and production of specialty chemicals, intermediates and Active Pharmaceutical Ingredients (APIs). Its products are used by diverse global end markets, including the world’s leading chemical, pharmaceutical, cosmetic and nutraceutical companies. VIO Chemicals R&D is dedicated to the development of cost competitive, high-quality and highly marketable products, while providing complete quality, regulatory and intellectual property support. The company is committed to the principles of sustainable use of chemistry and to its social and ethical responsibilities in all its operations. VIO Chemicals has its headquarters in Zurich. It operates in 3 countries and has sales agents in Europe, Asia and the Americas.

For more information, go to: www.viochemicals.com.