Procurement managers from three major Gulf Coast chemical facilities shared insights into navigating a challenging market environment marked by tariff uncertainty, extended payment terms and the ongoing effects of a soft market now entering its fourth year.
The panel discussion at the Economic Alliance Houston Port Region Industrial Procurement Forum featured Scott Bowen with TPC Group, Nikki Mason with Covestro, and Dub Edwards with Indovinya, the newly rebranded wholly-owned subsidiary of Indorama Ventures. BIC Alliance COO Jeremy Osterberger moderated the discussion.
Economic Alliance Houston Port Region Procurement Forum Procurement & Project Managers Panel
Cash and payment terms take center stage
Payment terms have become critical in procurement decisions as companies work to optimize cash flow during the extended soft market. "Before this, money was essentially ‘free,' but now we are very concerned with cash position along with good EBITDA," Edwards explained. "One without the other is a problem in a soft market." He noted the chemical industry has experienced soft market conditions for 12 consecutive quarters, with projections suggesting the downturn will continue through at least 2026. His company is working with suppliers on remuneration structures and focusing closely on working capital and inventory management. Mason described payment terms as "a huge initiative in order to extend cash flow" at Covestro. The company is examining bundled contracts with contractors versus one-off jobs and scrutinizing individual contracts to identify savings opportunities. Bowen noted that while procurement initiates the relationship, corporate finance teams are increasingly involved in seeking value from strategic contractor arrangements. "Contracts have to be executed in a way that owners are getting the most value out of the contractor relationships," he said.
Tariff impacts reshape supplier strategies
How tariffs are affecting procurement decisions varies widely depending on the category, with impacts ranging from minimal to significant. At TPC Group, larger plant equipment, particularly pumps and similar items, have become the largest tariff-impacted purchases, according to Bowen. The company is diversifying its supplier base both geographically and between domestic and global sources. "Sometimes a domestic supplier can be more viable because of tariffs, but sometimes there are no viable domestic options, leading to spending new costs due to tariffs," he explained. For Covestro, tariffs have primarily affected international goods purchases, particularly technical goods from overseas, steel (mostly from China) and raw materials, Mason said. Edwards said Indovinya hasn't seen much direct tariff impact yet but is asking suppliers for transparency to provide a viable defense for procurement decisions. Tariff concerns have highlighted an over-reliance on specific supplier regions, particularly China and India, prompting the company to restructure its approach. "This tariff experience has highlighted over-reliance on specific supplier areas, and we are now changing our organization structure and business models as well," Edwards said.
How suppliers can stay on the ‘good list'
Suppliers looking to maintain strong relationships with procurement departments heard clear guidance from the panel. "The easiest ways to stay on the good list: don't add tariff surcharges, be transparent about real tariff impacts and talk to us if agreements need to be modified due to tariffs, price increases, whatever it may be," Bowen said. Procurement teams want data and information showing how the plant is gaining from the relationship, including safety records and details about joint projects. This information helps procurement advocate for suppliers internally. Mason stressed the importance of proper communication channels. "Go through procurement rather than other departments. Proper channels have to be followed," she said. She also encouraged suppliers to allow procurement teams to tour their facilities or see them in action at client sites. Edwards advised suppliers to look beyond price when making their case. "Arguing price is playing in the margin but go to the other bits for defensible and viable areas to provide value to the owners," he said. Offering efficiencies, new technologies and transparent communication make procurement's job easier when defending supplier relationships to senior leadership, panelists noted.
Supplier selection criteria
When evaluating new suppliers, several key criteria matter beyond cost. Bowen listed safety records, ISNetworld qualification, reputation, references from previous clients and clearly defined specialties as primary factors. Edwards emphasized working closely with requesters, safety teams and finance departments to thoroughly understand business objectives before making vendor decisions. "It's not all about cost. We care about quality; total value delivered and safety," he said.
Supply chain challenges persist
Mason cited transformers and skilled trades as the most challenging categories to procure currently. Edwards said the direct side remains volatile daily, while specialty equipment on the indirect side continues to face supply chain disruptions.
Jeremy Osterberger with BIC Alliance, Scott Bowen with TPC Group, Nikki Mason with Covestro, Dub Edwards with Indovinya and Chad Burke with Economic Alliance Houston Port Region
Sustainability initiatives advance
The three companies are actively pursuing sustainability initiatives, though approaches vary. Bowen said TPC Group evaluates sustainability product by product and has made community involvement a significant part of its sustainability efforts, including a charity golf tournament that involves suppliers. Low-carbon initiatives and sustainability efforts are easier to implement with U.S. suppliers, Mason noted, as international suppliers and technologies aren't all aligned yet with domestic sustainability standards. Edwards said Indovinya conducts supplier audits, participates in industry boards and has set ambitious 2030 targets for sustainability measures.
Technology and digital tools
The panel discussed the evolving role of technology in procurement, including artificial intelligence and enterprise resource planning (ERP) systems. Bowen said TPC Group has "walled off" AI tools to prevent company data from being shared externally. The company uses AI to generate ideas not previously considered, while ensuring people remain in control of final decisions. Covestro has implemented a new sourcing tool that has improved efficiency, made contract reviews easier, sped up the process for bringing on new suppliers and enhanced ERP system capabilities, according to Mason. Edwards took a more cautious stance on AI, describing it as an "immature landscape" where "no one knows how to harness it yet in our industry." He warned that AI should be treated as a data point rather than gospel. "AI can help you make bad decisions faster," he said. Cost control and management tools, which Edwards called the "digital backbone", are critical for reducing time spent on low-value activities. His team takes a scrutinized approach to facility needs and works to monitor, measure and ensure that anticipated value matches delivered value.
Building strong procurement teams
Diverse teams with varied backgrounds and perspectives matter, panelists agreed. Bowen said having people from different backgrounds helps with the technical side of procurement and builds credibility with both vendors and plant operations. Procurement professionals can come from various backgrounds, but the key is finding problem-solvers, Mason said. Edwards said he doesn't want a team that thinks like him. "People have to feel engaged and valued or else you lose the best asset you have," he said.
Turnaround and outage planning
Bowen said TPC Group recently finished a unit outage and is now planning for a 2027 outage. Mason noted that Covestro now conducts annual turnarounds, typically in the spring. The extended planning horizons provide opportunities for suppliers to engage early in the process and demonstrate value through the complete project lifecycle.
Looking ahead
"Communication, collaboration and transparency make the relationship easier to keep and to go to bat for with higher-ups," Mason said. Companies want partners who bring solutions, not just products and services, panelists emphasized. The Industrial Procurement Forum was hosted by the Economic Alliance Houston Port Region, an organization dedicated to promoting economic development and business growth in the greater Houston port region.
