A key component of the modern world economy, the chemical industry delivers products and innovations to enhance everyday life. It is also an industry in transformation where chemical executives and workers are delivering growth and industry changing advancements while responding to pressures from investors, regulators, and public opinion. Discover how leading companies are approaching these challenges here on the chemical show.
Join Victoria Meyer, president of Progressio Global and host of the chemical show. As she speaks with executives across the industry and learns how they are leading their companies to grow, transform, and push industry boundaries on all frontiers. Here's your host, Victoria Meyer.
Hi, this is Victoria Meyer. Welcome back to The Chemical Show, Where Chemicals Means Business. Today, I have the opportunity to speak with Mark Eramo, who is now the co president of S&P Global Commodity Insights. Mark has been in the chemical industry for a long time, starting first at a producer and then quickly moving into insights and analytics and all the things that you know him for.
Um, and we're just going to be having a great conversation today about his history, the role of insights and more. Mark, welcome to The Chemical Show.
Thank you, Victoria. It's a pleasure to be with you today. I look forward to the conversation.
Absolutely. Um, so let's just start with your origin story. What got you interested in chemicals and ultimately led you to where you are today?
I appreciate, appreciate the opportunity to kind of tell my story. I'll start with as a kid who went into high school loving chemistry and math, um, and, also playing sports and doing everything else. But that, led me to a chemical engineering degree from Cornell University, where I also played football. I like to like to point that
Good to know.
I'm also, and that led me to the chemical industry. That led me to an opportunity to start with an operating company, Vista Chemical Company, um, in 1985. It actually were the assets that were spun out of Conoco Chemicals at that point in time. And I'm also very careful to point out that while I had the chemical engineering degree, I was not a practicing engineer out of respect for those who do practice the art.
So, but that degree kind of set me up for a career in chemicals, and I'm glad I went down this particular path. Um, short stint with the operating company, short stint, 10 years, 12 years, and then started with a privately held small consulting firm called Chemical Market Associates, CMAI, uh, which became well known, uh, during the eighties and nineties, two thousands.
Um, before we then became in 2011, uh, acquired by IHS, IHS merged with company called market M A R K I T. So a short stint, say 2015, until the merger with S P Global. That, uh, happened in, uh, 2022. Uh, so that was, uh, I always say I've only worked for two companies, um, an operating company and a consulting analytics firm, but the names changed multiple times while I was with both.
And, um, I also reflect on the fact that, next year, as you know, we'll celebrate 40 years of the world petrochemical conference. And, and I'm celebrating 40 years in this wonderful industry. And I've, I've really have enjoyed being a part of this chemical.
Yeah. Well, number one, I think it's a great heritage for WPC. Um, I hadn't, you know, 40 years of anything is quite a milestone. And then to your point, it is a great industry to grow up in, right? If you look around, uh, many of us in, in many ways have grown up in the industry, right? You start in your early twenties and you keep on. I tried to escape it at one point, um, and that failed. So here I am continuing on, uh, in the chemical industry for my career as well.
Yeah, I always like to quote John Huntsman Senior, the late John Huntsman Senior. It stuck with me watching him at a conference during my operating chemical days where he used to say, this is, this is the industry that advances the human condition. And I, that stuck with me and I truly believe that, that this is the enabling industry that makes the world better.
Yeah, I love that. And that's so true. So true. So tell us a little bit about S P Global Commodity Insights and who you are today, because you've already pointed out the transitions that you've gone through in your career and that these companies have gone through. So tell us more about who you guys are today.
Sure. Thank you for that, for that opportunity. Cause not a lot of people can quite place commodity insights, especially under the S P umbrella. So today S P global commodity insights sits as one of five divisions under the S P global brand. Um, some of the, uh, divisions that are maybe more recognizable, uh, from a global perspective, there's obviously S P ratings, um, the Dow Jones indices, the S P 500.
Um, there is S P mobility, which is really all about the, the automotive industry and transportation. Um, there is market intelligence, which is really where a lot of the financial analysis and forecasting, occurs, as well as in the ratings group. So between both market intelligence and ratings, there's a lot of economic analysis. Um, and a lot of focus on And then commodity insigh under, under the umbrella if you will.
And um, the to think about commodity is when we merged, IHS market merged with S P global in 2022. It was the S P global Platts division. So the largest, you know, one of the most successful PRAs in the commodity market space merged with the energy and natural resources division of IHS market. So, um, upstream analysis, gas and power, refining oil, chemicals, chemical feed stocks. agribusiness, uh, shipping, freight analytics and forecasting.
Um, all of those things came together with Platts, which is again, is the pricing entity and I should say pricing in editorial and news group. And that is what makes up commodity insights today is, is all of those capabilities. So I would say, think of us today as benchmarks across a wide variety of commodities, news and editorial that. Wraps around that, which includes the chemical week, uh, piece, which we've retained that brand along with the Platz brand.
And then a tremendous amount of deep analysis and forecasting that I like to say looks at the, so what something just happens. So, so what, in terms of my marketplace that I'm looking at and what does this mean for the future and whether your future is. I don't know, next week, um, or two years or 20 years for an investment case. We're doing things in our, in our business to help support the industry along those lines.
Yeah. That is, uh, you know, I got to say, Mark, that's really expansive, right? When I think about all the pieces of business that you now cover and now as co president, you really have to wrap your arms around it.
Yes. Yes, it did. And I should mention that, um, I'm co president with the gentleman, uh, Dave earns burger, who has also 40 years of experience. And he started in the S P family, if you will, many, many years ago, the same time, about time I started, but he came up through the, the really the benchmark and assessment side of the business. And I came up on more of the analytic side of the business.
So we're, we're excited to be leading this team together into whatever the next chapter will bring for us.
Yeah. So, you've seen a lot of evolution in your career and where you are currently with S P Global. What are your lessons learned when you think about managing and helping lead companies through transition?
Yeah, I actually get asked this question a lot because I've gone from, you know, a very successful, small, privately held, very focused, uh, chemical industry consulting firm chemical consulting and analytics firm to now I just described you as a very expansive, large publicly traded entity of five divisions and all the things that we're contributing to. The things I like to contrast are the strength of that smaller entity privately held is nimbleness and decision making, right?
It really kind of comes down to can you be decisive in your decision making understanding where you want to play in the competitive markets and just playing to your strengths and just basically making decisions as you need to along the way. Um, but then if you will, the downside of being smaller is you may be somewhat limited in your overall resources and the way that you can scale your reach, right? It's going to be a little bit more expensive.
Flip side, you get into the large entity that scale and reach is really there in spades. I mean, In terms of the commercial capabilities we have, the marketing capabilities that we have, I mean, some of the things that I see from the S P Global, either corporate marketing or divisional marketing teams is just best in class of anything I've seen over the years. But then maybe the constraint becomes that nimbleness, right? Because you are part of a larger entity.
And so what that comes down to is having the right leaders. In a framework that those leaders can make decisions in and then pivot if you need to. Right? So it really in both cases, it comes down to decision making in the larger entities. The most successful ones are the ones who can make fast decisions and pivot if they need to, because they've got that scale in that reach that they can provide.
I'll just add one more thing, whether it was the small entity or the large entity in this business, and you'll know this right is comes down to two things. Do you stay focused on your customers and what they need from you and focused on your colleagues, right?
Colleagues who are engaged and focused and really understand how they're contributing to the bottom line again, whether it's a small entity or a big company like S. And P. If you've got that focus on colleagues and customers, You know, I say you're going to be successful and I, in terms of navigating transition, that's the best advice I give any colleague is if you keep those two things at the forefront of your thinking and you're not quite sure of a decision to make sure you're keeping your
customers a priority, your colleagues as a priority, and you're probably going to be pretty safe in the decision you make.
Love it. That's, I think that's really wise, so just thinking about your business, um, and I think this is part of this evolution. So now that you're part of S P Global. What's different? What are you guys bringing to customers and market today as part of Commodity Insights? How are, how would we recognize what you're doing today versus what you've done in the past?
So I would, I'll start with that on what I would call the core of our business, which again is, is really founded in our heritage, which is very large, successful price reporting agency that is deep in benchmarks and price assessments and so many commodity markets across the world in the editorial news that wraps around that true. So for any given major commodity, Where did that pricing sell? And what's the news that wraps around that? Right?
And then on the other side of our business, we kind of pick up where that team leaves off and come back to the so what? And what's this mean for me tomorrow? Right? And so it's the resources, you know, that kind of bring, you know, A lot of data and analysis.
You know, I tell our teams all the time now that, there's a competitiveness that's playing out as, as you know, very well in the A. I. Developments, gen A. I. And the use of tools that are really all about the ingestion of data, the modeling of data, and then providing that data to the client base so that they can do what they need to make decisions in a timely basis and make, decisions with conviction. about the information that we're providing, right?
It's not that they're necessarily following our advice, but we're providing them a view that says because this is what happened, you might think about this commodity market trending this way or that way. And the quicker we can do that is really becoming one of the keys to what we're trying to do. We always maintain a view of the long term. And obviously that ties back into energy transition, um, into things that are happening around that to the marketplace. But yeah.
There seems to be like this need for decision making quickly and faster because things are happening so fast in the market today and the technology is changing on the AI front. So clients want and they need those opinions quicker. Uh, than ever before in terms of what we, I think about in those early days at CMEI, we were updating a short term forecast once a quarter. Expectations are right now, if something changes, the client wants it tomorrow, right?
Quote unquote tomorrow as quickly as they can get it. The other thing I would add is, is being part of S P is I feel like we can bring Resources to the table for our client base that we may not have had that capability in the past, whether it be the economics team, whether it be our sustainable one team, which is really at the forefront of a lot of the sustainability and discussions that are happening out there conversations around emerging technologies on energy transition.
The thought leadership and the gathering of executives and policy makers that occurs at a Sierra Week as well as at A WPC. So these are all resources that we're able to, if you will, garnish and bring together and leverage to the clients that we serve on a, on a daily basis.
The challenge is to figure out what are the right resources that bring to the table because chances are we're going to have it somewhere in the S P Global portfolio, depending on what the challenges that any given customer in this chemical space or chemical feed stocks or I like to call it the downstream industry. So as oil and gas gets processed and turned into product, Mhm. You know, the things that we can bring to bear on this are, you know, is as good as I've ever seen.
That's what gets me excited about now leading the commodity insights division along with Dave is the resources are available. We just need to figure out the best way to bring those to our clients.
Makes a lot of sense. So how are your clients responding when you, because this is a lot of change for them as well. Right. Yeah. Big change for you and your colleagues. Big changes for your, for your clients. How are they responding?
Great question. And thanks for asking that one again, because there's no doubt with any major merger, there becomes this very challenging period of inward focus. You've got teams that need to be integrated, products that need to be integrated, platforms that need to be integrated, methodologies, right? And there's an expectation from your customers that you're going to get that done.
You're going to get that done quickly, and you're going to come out with some clarity and bigger and better than ever before.
Yeah. In all in a week or something like that, right?
Absolutely; So, um, February of 25 will, of 2025 will be three years since the close of
3 years already.
Exactly. Three years
Okay.
And, um, I would say that we're not quite done. I, I say the integration and merger heavy lifting is done and we're into what I call the polishing phase. Because we're, we're not getting it all just right. I mean, I'll be frank and open and honest about that. The best thing that hasn't changed in the model that, you know, we provide our client base is access to some of the, you know, smartest people in the industry. Right.
So I. Those colleagues, those analysts who are doing the research, doing the forecasting and really involved in the marketplace are as available as they've ever been, to the client base. But, you know, the platform and the actual look and feel of certain reports and the speed with which we bring things out. Yes, we are doing some polishing there still. Uh, but it's coming. And I'd say we're, you know, 90% done.
I think as we come into 2025, I'm really looking forward into kind of declaring integration and merger over, and now we're on our way to just growth plans.
absolutely. And you know, I've been, I've personally been involved in a lot of different, um, transformations, uh, corporate transformations and, and, Whether they be via acquisition or whether they're just an internal transformation that is about your internal company, but also about your customers. And the reality is they take several years, right? It's about this whole keeping your eye on the prize for at least three years. Like, we'd like it to be a much faster cycle.
It's not, especially when you're dealing with thousands of people and hundreds, maybe thousands of processes and thousands of customers. Right.
Yes.
It's a long process.
Yeah. And you know, the hardest thing, um, and the thing that you need the most that we're driving towards is what's that new culture, right? Is when you bring these large entities together, um, what's the new culture that you will create? And, um, one thing I'll say about that is, is I do think gen AI is forcing us to think. and transform how we do what we do. And that is helping also drive a new culture.
Uh, because certainly as as entities come together and mergers happen and smaller companies become larger and larger and larger, there's this heritage inertia that just exists. And you kind of need a shock to get to a new inertia. And I think Gen AI is the shock to the system that will create a different kind of culture going forward as we rethink and transform the way we can do things because of Gen AI and the whole artificial intelligence side.
Okay. Let's turn a little bit to just what's going on in, in chemical markets today. 'cause of course, you know, you're an expert and people always want to hear from experts. I guess I'm just going to keep it broad. What are you, what are you seeing? What's the biggest trends that you guys are seeing that your customers are asking about, um, and that you see influencing the chemical industry today?
Yeah. So the biggest weight on the industry has been this continuous over supply of various commodity markets all companies are living Um, and trying to figure out when does, when does the pivot actually occur? Um, and that's wrapped up in so many things around new builds around scale of assets that are coming up, changing the build cycle.
When you look at the fact that China can build much faster than has maybe been accustomed to in the past demand in China, I mean, all, all things lead to China in any commodity market, right? In terms of demand and then the supply that may or may not be coming from China. Our analysis is saying. You know, fingers crossed, right? For the, if I'm a chemical industry person, you know, 2025 hopefully represents maybe a pivot point, 20 25, 26 to where we start to turn some things around.
So just the, the supply and demand cycle of low operating rates and pressure on profitability, the market continues to be working its way through that and trying to figure out that the added complexity with all of this is at the same time, the industry is being asked to decarbonize to deal with energy transition and what I would call the climate change era. It's another dynamic that we're in.
I've got to take this hydrocarbon based asset that I have, and I have to inject some capital to lower my carbon footprint based on commitments that have either been made by the corporation or commitments that are being, if you will, demanded by countries in order for me to participate in various markets. And so now I have investments that aren't necessarily accretive to my bottom line.
But they certainly support a decarbonization profile while I've got a core business that is not got the best profitability. So I have to balance that capital. How do I keep the hydrocarbon business running while I invest in a greener business, right? And I'm just using or a low carbon future and make all these things come together. And that again, is one of the themes that we have for World Petrochemical conference next year is, uh, how do I make investments for growth?
While I'm planning for a low carbon future, and we're saying, you know, 40 years of success and now what do the next 40 years look like for the industry? And that is the challenge is I need to invest for growth. Because while we may talk about peak oil demand, we don't talk about peak chemical demand, because the chemical industry is the mean by which the 8 billion people in the world. We'll have consumer goods, durable or non durable made for them, and we don't expect that to stop anytime soon.
And so if those 8 billion people are going to need various levels of consumer goods, we think the chemical industry is the enabling force that makes that happen. As it has been for so many decades, it will change in terms of how it does it. But, that demand is still going to be there. So you've got to balance those 2 things at this point inflection point in the industry. Okay. So I would say those are the two big challenges, right?
yeah,
I've got a, I've got an oversupply down cycle with low margins and a lot of pressure on me from, uh, stakeholders, whether they be policymakers or my own board of directors, to be able to say we're doing everything we can for a low carbon future. Uh, and that is a real tight rope for the, for these companies to manage.
yeah, absolutely. And then, add the added complexities of, of geopolitics, and the various wars that we're seeing. Um, That, you know, reflect on supply chain challenges, politics, just in the sense of, uh, leadership changes, right. Not just the U S but globally, we've seen a, an astounding number of elections this year. So there's a lot of, um, pressure and business uncertainties in the midst of some of these big strategic changes that you've referenced.
Absolutely. Yeah.
So with that, what advice are you giving? Like if you, you know, if somebody said, okay, well that's Mark, that's great. I, okay. And what should I do now?
Yeah. So, um, some of the, I guess, advice analysis is, is this conversation that it needs to occur. Let me back up a couple of things, from the fundamentals of the industry recognizing that, demand is continuing to grow and how do I adjust to a news what I call build cycle in an age of mea units, countries trying to really enable more crude to chemicals, more liquids to chemicals. Um, I need to really get my arms around what that build cycle is going to look like.
And so, and what will be my participation in different countries or different regions based on competitiveness? Do I think, um, you know, crude is going to stay high or is it going to go lower? Um, is, is the Middle East and North America going to remain You know, really, really competitive from a feedstock perspective as more and more demand comes on the liquid side of the business, whether it's aromatics or olefins. And so there's planning that.
So really it's kind of having scenarios for the core of your business around what do you think is gonna happen on the energy dynamic?
Um, and how will that impact my build cycle, my capital investment planning for the future On the other side of the equation again, in terms of of energy transition, and this is kind of companies and policymakers working hand in hand to say, um, how do we make sure that the commitments we're making and the investments we're making are keeping up with the technology? And that the policies are also keeping up with the technology.
Um, and that we're also, building from the standpoint of making change in the products to what the customers are willing to accept. So you've got to that's willing to pay for will, right? And you've g that will enable you to g I've got policies that sa for me that may be realis based on those three thin right? And so our advice is really just sound self serving.
Let us help you get your armed around these different dynamics from geopolitics and policy making versus what's happening on the technology front versus what are the consumers asking for and needing and wanting and willing to pay for. And being pragmatic about this thing called energy transition.
Because if those three things don't get in, get lined up, then What you do is you get unintended consequences, the, this, this lodging of, if you will, um, I'll say the demand side, the demand side of the business, right? In other words, I go make a product that I need a premium for, but if nobody's willing to pay the premium, then what am I going to do? Right.
I mean, we're fake companies are facing this right now, right? That's the, that's the biggest conundrum that we're in. It's a chicken and egg scenario, right? Um, we need more sustainable products. Who's willing to pay for the most sustainable products and they're not willing to pay. So then I've got to keep doing what I'm doing. And yet I need the higher value to fund investment. And, It'll work out, but my guess is not as quickly as anyone would have hoped.
And the policy needs to be informed policy, the policymakers need to not stay in a vacuum, they need to bring industry to the table, to help solve these, these problems, right?
So Mark, let's turn and talk a little bit about leadership. And maybe leadership advice. You've had a really great career, um, 40 years in the industry. Um, so I've actually got two parses. We're going to. I'm going to start with part one, which is, um, what advice do you give to young engineers entering this industry that want to achieve your level of success?
So, um, I'll reflect back on some of, the mentors and coaches that I've had, or even still have, uh, even 40 years into the industry, which is really be open, be flexible, um, in terms of opportunities that may come to you in terms of using your skillset, understand how you wanna really apply your skillset.
And then think about in terms of, um, especially in this world of, of being an, an analyst of the industry, in this segment that, you know, that I've grown up in now for, you know, since I left the operating world, is, you know, do you want to be the expert of the industry? Do you wanna manage it? Or some combination of both. Do you want to be a player coach? Do you want to just be that expert that everybody turns to for that advice? Or do you want to be the manager?
Who's kind of bringing all the, all the pieces together, because those are different things and you know, the good Lord gave us 24 hours in a day and it's probably good to sleep for a few of those hours. Um, and so you can't be all things to all people. And so that's one of the things that I was, you know, advised early on One of my first roles at CMEI was as, as being the ethylene guy, right?
Do you want to be the world's most renowned ethylene expert, or do you want to manage a group of people who are those commodity market experts or, and there is, there is the in between, right? I call it player coaches, which was certainly. certainly doable. Right? that's one of the things younger folks that I talk you become more and more You know, what you do is you take reward in seeing those folks you're managing be successful, right?
Yeah. So as you become more of a coach manager, what you're really doing is it's about putting the right athletes in the right position. So I always fall back to my football life. Um, you want the right athletes in the right positions and taking pride in them, excelling in their game. Um, and, and you being the one who manages that, or if you want to be the. You know, the star wide receiver or the star quarterback or running back or defensive end, then that's good as well.
And that's kind of where you wanna focus your efforts.
Love it. That's really great. Um, my part two of this is attracting people into the business, whether it be the chemical industry as a whole, or into S P global commodity insights, because again, you're in a unique space that maybe a lot of people. Chemists and chemical engineers. And I don't really know what the profile is of your team necessarily. How do you attract people into your business?
What one of my greatest learnings in making the transition from, um, I'll say CMEI up in, up, up to where I am today, right, is that you need a very diverse workforce from all walks of life. Um. Our news and editorial and price reporting people are just as important as, um, I've got, you know, Ph. D. Chemical engineers who are doing third party assessments of industry technology, right?
And those individuals are on opposite ends of the scale in terms of experience and education and the things that they've grown up with. But we need them all. we need everybody in betw with purchasing experienc experience. Um, I mean, i on and on. And so in, in, entity, you know, you tend just have certain profile what you're trying to do I mean, even in the business now, what we want to do is put people in front of clients who are, have an expertise in some grounding in that industry.
I'm going to go talk to an executive of a chloralkali industry. I want to put somebody in front of them who knows chloralkali or polyethylene or benzene, whatever the case might be, but there's a whole other ecosystem that supports it. And, and S P is just a great example of that. I mean, we're a large company. Tremendous diversity of, along all different measures of diversity and along all different skill sets.
Placing an emphasis on what each individual brings to the table is, is really the key. Um, because you think about, okay, the chemical team must be full of chemical engineers.
That would be my thought.
we have a lot of people with chemical engineering background in the chemical, uh, Segment, but not all of 'em are chemical engineers. Not all of 'em are even chemists, right? It does take a, a variety of backgrounds and you want that diversity 'cause it does bring a richer experience and perspective to the, to the table. And that's been one of my greatest learnings in this.
And I think what S P offers is that diversity of experience diversity of individuals that they welcome into the tent and say, we've got all kinds of opportunities. Come join us. And we'll we'll find that right position on the playing field for you, uh, based on your skill set and what you excel at.
Very cool. Awesome. So what's next for you? What's next for you? What's next for S P global commodity insights?
So having one day removed from a pretty exciting announcement of now being co president with Dave Ernstberger of the commodity insights division, um, that will also, be merged with the Sustainable one group, um, with an emphasis on energy transition and sustainability becoming a bigger part of our portfolio as, as we look to 2025.
Dave and I, not only stabilizing things because it is another bit of management change that we want to make sure is stabilized, but really accelerating the growth that we have in our core analysis around the research and analysis that we're doing in these core commodity markets, the benchmarking assessments that we continue to grow in really looking at What our offering is and make sure it's crystal clear on the sustainability and energy transition front. Those are our big opportunities.
Um, in addition to the core of of our business, helping clients understand what's coming next, what's in front of them, what are the decisions that the, that they're gonna have to make. You will see all of this in spades, uh, on display at. WPC in March of 2025 in Houston, um, which also happens. Also what's happening in Houston in March is the Syr week event, which is also a major energy event. So they are back to back their different weeks this year, which is good. And
Easier, better for you and better for the people that want to attend both. Yeah.
Yes, exactly. Exactly. So those are those are our themes. That's where we're focused. We're excited about it again. I'm excited about declaring merger and integration over and just kind of getting on with the growth story and focused on our client base and how we can help them best.
Yeah. Sounds really great. Thank you, Mark. Thanks for joining me. I've, I've loved this conversation. I know others will as well.
Thank you, Victoria. I appreciate the opportunity and great, great conversation. Thank you very
Yeah, absolutely. And thank you everyone for joining us. Keep listening, keep following, keep sharing, and we will talk with you again soon.