C&EN: COVER STORY - TAKING CHARGE

ALEXANDER H. TULLO, C&EN NORTHEAST NEWS BUREAU

On July 1, a woman became the head of a major U.S. chemical company for the first time. The woman is Fran Keeth, and she is president and chief executive officer of Shell Chemical LP, the U.S. arm of Shell Chemicals Ltd., based in London.


	TAKE FIVE Keeth enjoys a break during a press conference in New York City. PHOTO BY TERI BLOOM

Keeth will not head a publicly traded chemical company as do the CEOs at the firms covered in C&EN's annual survey of women in top management positions (see page 18)--no woman ever has.

But the company Keeth will manage is bigger than all but three publicly traded U.S. chemical manufacturers--Dow, DuPont, and PPG Industries. In fact, with annual sales of nearly $6.3 billion and $4.6 billion in assets, Shell Chemical ranked 11th in C&EN's survey of the Top 75 U.S. chemical producers.

Keeth is aware that her appointment has special meaning. "It is something I think about, because why in the industry are there so few women near the top" she says. "I don't think it has been malice that has kept women from getting the jobs.

"When selecting for those positions that prepare you for senior operating roles, women are often not considered. It is often assumed that women are not interested in international assignments or that they would not be willing to travel extensively."

A look at Keeth's résumé reveals nothing unusual, except that almost all of her jobs have been in finance. Chemical chief executives tend to have numerous sales and marketing, product manager, and business manager positions before edging into the upper tiers of management.

But like top chemical executives, Keeth has progressed through a series of positions of increasing responsibility. She earned her master's degree in accountancy and taxation and a doctorate of jurisprudence from the University of Houston. She began her career at Houston-based Shell Oil Co. in 1970. There, in a series of jobs, she advanced from director of federal income taxes to general manager of finance for Shell Oil & Chemical Products.

In 1992, Keeth was called to London by the parent company, Royal Dutch/Shell, where she was deputy controller, area coordinator for the East Australasia regions, and oil products finance manager.

Keeth left Shell in 1996 for a year to become worldwide controller for Mobil Oil. She then returned to Shell--this time to Shell Chemicals--as global executive vice president of finance and business systems, a position that made her the chief financial officer of the company.

As president and CEO of Shell Chemical, she is taking the place of Jerry Golden, who had held the position since 1998. Keeth will also become executive vice president of customer fulfillment and three Shell business units: higher olefins, styrene and propylene oxide, and propanediol. Golden is retiring to start a second career in anthropology.

In addition to leading the U.S. chemical operations, Keeth will retain global functions within Shell Chemicals and will be responsible for improving the capital investment process and implementing what Shell calls a "value-based" management style throughout the company.

She will also be in charge of tying up the loose ends following Shell's recently completed divestment program, in which the company sold off downstream businesses such as polyethylene terephthalate and epoxy resins.

Finance, Keeth says, paved her way to the top. The road may have been bumpier if she came from, for example, the sales and marketing side of the business. "Support functions were not seen as the line to the top, so it was perfectly fine for women to have those roles," she says.

Shell Chemicals, Keeth points out, is taking steps to make sure that women have fewer barriers to success in the future. By 2008, the company aims to have 25% of its executive positions held by women. The company is currently at 11%. The entire Royal Dutch/Shell group is aiming for a more modest 20%.

The system of placing executives at Shell Chemical will be no less meritocratic than it had been when a man was in charge, Keeth says. Instead, she predicts Shell will have a broader talent pool and an environment where women will have better chances to succeed. "They will be able to put more energy into their work; they won't have to spend their time trying to fit in," she says.

Keeth defies the kinds of stereotypes that she says have held many women back. In addition to the stint in London, her jobs have entailed an enormous amount of traveling. For example, in one week last month she delivered a speech to analysts in London, was in New York City to talk to reporters the next day, and on the third day left for China to help plan the company's proposed ethylene complex in Nanhai.

But Keeth is not afraid to show a more feminine side. In a recent press conference, she modeled a suit made from Shell's Corterra polytrimethylene terephthalate fiber. And she is proud of her son--now a chef in Houston--who was born when she was in law school. "While the other mothers were singing lullabies, I was reading him the law," she quips.

Keeth says her vision for Shell's U.S. arm is to ensure that it plays a role in the goal of the global organization: to be recognized as the best company in the petrochemical industry by 2005.

She has clearly succeeded at Shell, but Keeth expects that her work is still cut out for her in the rest of the chemical world. "I have worked with many people at Shell, and they know my capabilities," she says, "but I have to win the respect of the business heads at other chemical companies."

It's been almost three years since Shell Chemicals changed direction and embarked on a major reorganization and divestment program. According to Chief Executive Evert Henkes, the numbers Shell is posting today demonstrate that the about-face has worked.

The revamp came in 1998, when Shell executives concluded that the company wasn't succeeding at "downstream" chemical businesses. In response, they launched a program to either sell or restructure 40% of the company and concentrate on products close to the cracker.

Shell completed the program in March with the sale of its Kraton polymers business to the private investment firm Ripplewood Holdings. Along the way, the company cut its number of businesses from 21 to 11, reduced the number of plant sites from 54 to 17, and slashed the number of employees from 21,000 to 9,000.

But for Henkes, the most important numbers relate to capital employed--the money Shell puts into the business. Meeting with reporters in New York City recently, he said capital employed has dropped from $12.7 billion a year to $8.5 billion. The normalized return on that capital, meanwhile, has jumped from 7.2% to 14.8%. Shell's return is now equal to that of ExxonMobil Chemical--its leading peer--whereas it was 8% behind Exxon three years ago.

Shell is posting these numbers on the strength of six business units in basic chemicals that are all ranked as number one, two, or three globally in their respective markets. Three other businesses--the Basell polyolefins venture with BASF, the CRI catalysts unit, and Infineum oil additives--represent Shell's remaining nonbasic activities.

According to Fran Keeth, president and chief executive officer of Shell's U.S. arm, Shell operates all 11 businesses globally, concentrating basic chemical production at six "supersites" around the world that share infrastructure with Shell refineries.

In its slimmed-down form, Shell intends to invest about $800 million a year, mainly to maintain and expand these sites. "Our focus will remain on making the most of what we have," Keeth said, and not on pushing into new businesses.

One such investment is a new $400 million program to add about 500,000 metric tons per year of ethylene capacity in Deer Park, Texas, through the refurbishment of an idled cracker there.

Not included in the $800 million is Shell's planned investment in a major ethylene-based complex in Nanhai, southern China, in partnership with China National Offshore Oil Corp. The project--12 years in the making, Henkes admitted--was finally registered with Chinese authorities late last year. It's in the "project definition phase" now, and a final decision is expected in the summer of 2002.

Also not included are petrochemical plants that could be built in Saudi Arabia as part of a huge natural gas project launched recently by the Saudi Arabian government (C&EN, May 28, page 10). Of the three gas fields set for development, Shell is involved in two, each of which could eventually host two major petrochemical complexes, Henkes said.

In addition, gas from one of the fields could be supplied to Shell's existing SADAF petrochemical joint venture in Saudi Arabia, allowing the venture to be expanded.

Shell is also looking to expand in Singapore, where it is already involved in two ethylene joint ventures with Sumitomo Chemical. Shell could build a third cracker alone or in another venture with Sumitomo and its merger partner Mitsui Chemicals. "We are considering all options," Henkes said.

Henkes and Keeth need to assess investment options through the more limited prism of the new Shell Chemicals. Today, four themes--delivering bulk petrochemicals, large industrial customers, simpler structures, and lowest total delivered cost--define the investment strategy.

By way of example, Henkes pointed to Malaysia, where the Titan Group petrochemical complex is for sale, and probably for a good price. "It would be very tempting to do a project with attractive economics, but one that doesn't fit into the overall Shell strategy," he said. "We are determined to stay consistent with our four strategic themes."