Thierry Capelle is President of Shell Chemicals Arabia. He talks to ‘Shell in the Middle East’ about his background, the challenges he has faced in his career to date and the business objectives of his current position. He also talks about his personal goals of mastering the Arabic language and of running a marathon every year...

Q. Where were you born, brought up and educated?

I was born in Paris and spent my early childhood there. My mother was from Paris, my father from Correze in central France, and I have a sister who is five years younger than me. My father worked in the car industry at Citroen. I spent my childhood in Paris and went to a grand école, which is a type of top-class school in the French education system. At 19 I joined a chemical process engineering school in Nancy.

At school I was a hard worker and was particularly good at physics and mathematics. As a result, I was able to earn extra pocket money by teaching younger students maths in my spare time for a small fee. This enabled me to make enough money for Christmas and to pay for extra holidays skiing, cycling and sailing, mainly in Brittany.

As a young man I was very focused on my work, in particular the science subjects. I spent three years at Nancy studying to be a chemical engineer and graduated in the top three of my year.

I then joined the Army for a year as in France it used to be compulsory. However, there is an element of choice as to what you can do and I chose to undergo officer training in the Special Forces, or Commandos, in the Cavalry - which today, of course, means tanks not horses. The training was tough, especially from the physical aspect, but it taught me how to cope with stress, both mental and physical, and the officer training aspect was very useful in teaching me how to manage people.

The training period lasted for four months, after which I graduated as an officer and was then posted to Metz in the east of France. During the rest of my military career I spent a lot of time playing sports, particularly running. I specialised in running a half marathon, which is 21 kilometres, and in those days my fastest time was one hour, 22 minutes, which was pretty close to national level.

Q. What was your first job after leaving the Army, and what were its particular challenges?

After leaving the Army I naturally looked for a job in the petrochemical industry. I wanted to live in the south of France and both Total and Shell had petrochemical operations on the Berre Lake, which is outside Marseille and is home to a cluster for the petrochemical industry in France. I applied to both companies and was accepted by both but chose Shell because of the greater international exposure that the company offered.

So I joined Shell Chemicals Berre complex, which consists of a refinery, petrochemical complex and plastics manufacturing facility, employing in total over 2,000 people.

My first job was as a technologist, working in a polymer plant which made PVC [poly vinyl chloride], and when I joined there was a project to de-bottleneck the plant by 50 per cent. This involved a lot of hard work, designing the new plant, and the project took 18 months.

Following this I was offered the opportunity to become Assistant Plant Manager to implement the project I had designed at the new plant. This gave me the chance to develop some new leadership skills. I remained in that position for two years before moving to another job within the Berre complex, where I was responsible for the economics and scheduling of the plant’s steam cracker.

This was quite interesting because in Europe, as in Asia, most of the feedstock for the steam cracker is liquids, such as naphtha, whereas in the Middle East it is mostly gas in the form of ethane. So in Europe we had to compete with Middle East petrochemical plants which were, and are, using cheaper gas as a feedstock. Naphtha being liquid has its price associated more with crude oil, whereas ethane, as gas, is generally cheaper, especially in Saudi Arabia. This makes it difficult sometimes for European companies to compete with Middle East petrochemical manufacturers.

My challenge was to improve our competitiveness, which required a lot of creative thinking, and we developed considerable flexibility in terms of changing feedstocks on a weekly basis, depending on the pricing of naphtha, gas oil, propane and butane.

At the Berre plant we developed the capability to crack LPG [Liquefied Petroleum Gas] to produce ethylene and propylene.We discovered that there was a huge seasonality in the price of LPG. In the summer it was very cheap but in the winter it was expensive as demand for heating fuels rises. LPG is difficult to store so refiners are very happy to have someone to take it off their hands in the summer, which enabled us to purchase LPG at a very low cost in that season. So in the summer we took LPG which we used as our feedstock.

Later on the industry moved ahead and developed storage facilities for LPG and the price advantage disappeared, but for several years we were able to use this to our advantage.

Q. Can you tell us a little about your family life?

When I took the job at Berre I lived in Aix-en-Provence and this is where I met my wife, Marie Aimée, who was studying law at the university in Aix. We married a year after we met and decided that we had a few common targets in life, one of those being to have a big family and specifically four daughters. This we did and indeed today we have four daughters and two sons. Tragically my wife lost a daughter in childbirth recently but she is expecting another child in June of this year. Our family is the most important thing in our lives.

Q. What was your next job at the Berre complex?

My next posting was as Human Resources Manager in the Berre complex. Within Shell we have an HR tool called MF15 which assists management in determining how many people are needed to operate a certain asset. The results showed that the Berre petrochemical complex was not competitive and we needed to reduce staffing levels by around 25 per cent, which represented some 100 people.

This was a tough assignment where I had to learn to develop my negotiating skills to talk to the unions. However, at that time I was also able to appreciate the core values of Shell as a global company, namely integrity, honesty and humility. The way we dealt with these 100 people still makes me very proud of the way we managed their departure from Shell. Many of them came back over the following months and years to compliment the management at the Berre plant on the fair and just way in which their employment had been terminated.

We helped many people to change their occupations, offering early retirement to the older staff members with very good benefit packages. We helped other staff members find jobs and I remember one man in particular who opened a restaurant in the Alps and became very successful. I am very proud of what we achieved then. Shell didn’t just fire people but helped them find new alternatives, and in the end everyone was satisfied. The whole process took place over a three-year period.

Q. Your next job involved a posting abroad. What did that entail, and did you enjoy it?

My next assignment was my first outside of France. I was posted to London as a business analyst for Shell Chemicals, based at the Shell Centre in London. This was at a time when Shell Chemicals had gone from having individual operating companies in Europe to a centralised organisation, Shell Chemicals Europe, and we were still busy reorganising and consolidating the business.

It was quite difficult to get the concept of ‘enterprise first’ across to all the different operating units, especially the big ones, so the challenge was really to bring about a new mind set and a change in the way of working. I think we did this successfully and brought about a significant growth in our business. At that time it was very exciting to develop new business in areas we had not penetrated earlier with our lower olefins business, such as in Belgium and Germany.

After a few months as a business analyst I got bored and decided that I wanted a change. One of the good things about Shell is that you can go to your boss and speak frankly and openly about how you feel without being penalised or reprimanded for it. I asked him if I could do something else and he reacted very quickly. Within a week I was nominated to participate in the Shell negotiating team for the establishment of a new petrochemical company, to be called Basell.

This was a joint venture between Shell and BASF. So suddenly I became overwhelmed with work although I did receive a great deal of support and coaching. What I learned at this time was how to structure a big organisation from scratch. It was a very valuable lesson.

After setting up the organisation I was made responsible for negotiating the feedstock agreements with the joint venture and was then asked to implement these contracts, so I became the Ethylene Product Manager for Shell in Europe. This meant that I managed the company’s portfolio of contracts across Europe for ethylene, including our Basell joint venture.

In London we lived in Earls Court in a fabulous house and enjoyed our years there very much. The children went to the excellent Hill House International School in London, so our time there was good from both professional and personal viewpoints.

I was fortunate that as a child my parents sent me to the UK to learn English so, unlike many French people who choose not to learn the language, I had no difficulties communicating when I moved to the UK.

Q. What was your next posting with Shell after London?

My next job was in Singapore, again with Shell Chemicals, as the company’s Joint Venture Manager and General Manager for Base Chemicals in Asia Pacific. As JV Manager I was a Director on the boards of six joint ventures in the Asia Pacific region, mainly in Singapore but also in Japan.

This gave me the opportunity to travel to Japan quite often. I found Japan and the Japanese people to be intriguing and I enjoyed learning about the country and the culture very much. I especially loved, and still love, Japanese food. The refinement in the presentation and taste is a true art.

In Japan the subtlety of relationships is also quite unique and you need to read between the lines a great deal. As with the Middle East, relationship building and trust is extremely important. I still keep in touch with many of the people I worked with over the years in the region.

The main joint venture in Singapore was centred around a cracker called PCS with Sumitomo Chemicals. I was a Director of this joint venture as well as Venture Manager, which meant I was the Shell focal point for the joint venture. In Japan I was on the Board of Shell Chemicals Japan, working with secondees from Showa Shell Sekiyu KK.

Another part of my job was as GM for Base Chemicals in Asia Pacific and I was therefore responsible for the sales and marketing of propylene and aromatics. The third dimension of my job in Singapore was to manage all the sales of the petrochemical products of our new cracker project in Singapore, which is now being built and will be going into production in 2009/2010.

Singapore was a great experience for me and my family. It was the first time we had lived outside Europe and we lived there for five years. Singapore is a fantastic place in terms of infrastructure, schooling, medical care and so forth. It is a very efficient society and the Government is extremely supportive of new business development, providing a great deal of help to foreign investors – which is one of the major factors in the country’s tremendous success. And, once again, the food in Singapore is absolutely fabulous!

Q. You moved to Dubai in the summer of 2007, to the job you hold today as President of Shell Chemicals Arabia. How are you finding Dubai and what are the particular challenges of this job?

I wanted to come to Dubai because it is very much like Singapore. It is developing very quickly but, as I have learned over the last few months, at a much faster pace than Singapore. Geo-politically it is an exciting and interesting place to be, and Shell has a long history in the region, with major investments in many countries of the Middle East.

There are many dimensions to my role as President of Shell Chemicals Arabia and these include sitting on the Board of Sadaf [Saudi Petrochemical Company], a 50-50 joint venture between Shell and SABIC [Saudi Basic Industries Corporation].

As a Venture Manager I have to provide assurance to Shell on the adequacy of the joint venture’s system of internal control and risk management and on compliance with Shell’s Business Principles and HSE Commitment and Policy.

Sadaf has always been one of the jewels in Shell’s portfolio and is currently doing extremely well, especially in the current market with very high oil prices. The selling prices for petrochemical products are closely related to the crude oil price, so a high crude oil price means that Sadaf, which uses low-cost ethane gas provided by Saudi Aramco, makes very good returns in the current business environment.

Sadaf has undergone a comprehensive reorganisation which has concentrated heavily on reliability, with the help of Shell Global Solutions. This has paid great dividends and reliability is now very high. However, in common with many other industrial plants throughout the region, and especially in Jubail Industrial City, which is where Sadaf is based in Saudi Arabia, we are facing shortages of qualified, experienced and trained staff due to the enormous demand for engineers and operators throughout the industrial sector. The industry is absolutely booming and growth plans in the Middle East are ambitious – to say the least – with many international companies looking to build new industrial plants in the region.

This puts a drain on all resources, particularly human resources, and at Sadaf we are struggling to attract the right people and then to retain them. But both SABIC and Shell are doing their best to support Sadaf on this issue and, indeed, Shell has provided several secondees to assist Sadaf management. In my role as New Business Development Manager for Shell Chemicals in Saudi Arabia I am also actively looking to develop a new platform for growth for Shell Chemicals in the Kingdom. Obviously Sadaf, where we have an existing partnership, is one area which I will be examining as a possible growth platform.

Q. So how is your family enjoying Dubai and what do you do to relax?

The kids are at good schools and we have all settled in very nicely and are enjoying life in Dubai very much. It is an exciting place to be and we look forward to exploring the UAE and the neighbouring countries as a family over the next few years.

I really appreciate the fact that there is a freedom of religious choice here and that there are facilities for Christians to practice their faith in the UAE. I think that this shows a very modern and forward-thinking mind set from the authorities.

I go windsurfing with my kids, and I am looking forward to sailing when I can. I have started to learn Arabic and I like the way the language works. I like its structure and I hope that I will manage to master it.

Another one of my targets is that I try to run a marathon every year and this is going to be my goal for 2008 – which will be a very good thing especially, as you will have realised, I have a passion for food and can always do with the exercise.