Review of 4th ICIS World Surfactant Conference
Nw York November May 15th and 16th , 2014
I was again honored to co-produce and chair the ninth surfactant conference in our series with ICIS. This time – the fourth World conference, held in New York at the Jersey City Hyatt hotel. The venue was packed with over 200 participants in the surfactant value chain. You will get a sense of the agenda here.
Friends and colleagues from across the globe spent one and a half days engrossed as we heard from some of the leading companies in the world share their knowledge and experience in what has become a unique forum.
Here, I make a point or two regarding each of the speakers and hopefully give you a flavor of the type of event that we will produce coming up, September 4th and 5th 2013 in Berlin, at the Third ICIS European Surfactants Conference.
Also, you know my philosophy is “you gotta be there” to get the benefit from these conferences, so this is not intended to be a write up / substitute for being there. !
My opening remarks featured a review of the just how critically important surfactants are in our world economy. We looked at applications in food, farming, mining, oiffield and of course hygiene, health and cleaning. Our video to make this point was again a monty python clip (below). Can you spot the connection? (as I said, you have to be there..)
Day 1 kicked off with what I have to say was the best keynote address I have seen delivered at any event I’ve ever attended. Quinn Stepan, CEO of Stepan Co (NYSE: SCL) delivered a crisp analysis of the industry and Stepan’s commanding role in it. Stepan is all about surfactants and has a finger on the pulse of what is happening in every single sector. Quinn highlighted the potential large upsides in the oil and gas sector and also the challenges they have had to deal with in the laundry sector as formulation trends have impacted surfactant loading. The Q&A, for me, was even more enlightening than the talk. Our friendly and engaged audience, lived up to their reputation and asked some great questions, which Quinn fielded by drawing on a lifetime of experience and over 80 years of company history. Best trivia item: Quinn’s grandfather, Al, started the company in 1932 with a $500 loan from his mother – which he paid back. Throughout the whole rest of the conference, at least half of the speakers strayed from their presentation to react or add to something that Quinn had said. For me, this was the perfect keynote to start our largest and, it turns out, most highly rated conference ever.
Next up, Dr. Leslie Low from the Malaysian Palm Oil Board (MPOB), dazzled the audience with a layman’s guide to groundbreaking genomic research which is poised to alter the nature and productivity of the world’s (and surfactant industry’s) most important oil crop. This piece in the UK’s Grauniad newspaper summarizes what the impact of this work could be. Dr. Low went further into the impact on the surfactant value chain – which can clearly be enormous.
After the break, Doug Rightler of EO&D Consulting delivered his eagerly anticipated annual review of the EO (ethylene oxide) markets. Compressing a Master’s level course into 45 minutes, Doug’s overall point this year seemed to be that “it’s all about the MEG” and if you use purified EO for surfactants, right now, you are not as interesting to the EO producer as a million MT bulk MEG customer.
Doug’s a tough act to follow, but Yuree Whang of UOP, more than met that challenge with an objective and interesting take on the global LAB market. Interestingly, 80% of the world’s LAB production capacity uses UOP technology, so she knows the subject matter and arguably has a unique perspective.
Shale gas is the topic of the moment, so we wanted to address it in a way that got close to the gas field but also linked directly to the multiple impacts on the surfactant value chain. Mike McKibben of the Marcellus Shale Coalition did just that. Interesting number: Between now and 2020, half a trillion dollars worth of capital expenditure is planned just on mid-stream infrastructure to handle shale gas output!
Looking far out to the end of the detergent supply chain, Philip Malpass of the UKCPI delivered a fascinating analysis of the impact of laundry detergent monodose (i.e. pods, tablets etc..) on consumer behavior in Europe and its effects on the entire supply chain. An interesting perspective from the supermarket aisle and through the lens of a TV camera.
Continuing the theme of looking at our industry’s through the eyes of the shopper, Croda’s Jennifer Donahue talked through some groundbreaking work done on quantifying the effects of various surfactant ingredients on the perceptions of leading skin care products, by the user.
Our sustainability paper this year was a detailed and thought provoking analysis of oleochemical alcohols vs petrochemical alcohols from and LCA perspective. The data and ensuing debate brought to mind the old Henkel / Vista debates of the early 90’s around LAB and oleochemical alcohols. Julie O’Brien of Air Products did a masterful job weaving a story from a rich data pool. The discussion arising from this paper was one of the best I have seen at any of our conferences.
Surfactants and Enzymes; friends or foes? An interesting title for a insightful talk by Danielle Rhine-Showmaker of Novozymes. This talk was the third in a trio of presentations give by Novozymes in our series; first in Europe last year then Singapore and now New York. Attendees now know and appreciate the symbiotic relationship between these two key ingredients.
A long-time supporter of our conferences, Richard Smith, CEO of Surfachem, the European chemicals distributor, gave us a thoughtful analysis of the role of distribution in surfactants. He illustrated how distributors can also be innovators in serving the middle market of small to mid-sized customers. Something to think about for both manufacturers and users of surfactants.
Wrapping up Day 1, Hernan Cavarra of Frost & Sullivan gave a tour de force presentation chock full of data, information, insights and opinion relating to the Latin American surfactant market. I always like to say about our conferences, that you “just can’t get this anywhere else” and Hernan again proved this true. “Argentinian Shale Oil?” You learned about it at our conference first.
As is customary at our conferences, we played some thematic music as people walked in and got breakfast on the second day. Our Surfactants Playlist
for the conference has an easy to spot theme, with some Rush music interspersed for good measure. I trust you can see the connection of most of the songs with our overall theme for the conference (click on the link above)
Day 2 saw a packed room again as the air-conditioning labored to keep up with the volume of people. First up Dr. Charles Hammond of Flotek, Inc. addressed the question “Surfactant EOR – When?”. This is a question that pretty much everyone in our industry has asked at some time in their careers. Charles gave us a useful framework for developing an answer. What is it? You gotta be there.
Staying in the Oil & Gas field. Scott Gale of Solvay, a relative surfactant newcomer but a veteran of the oil-patch, delivered a data-rich analysis of where the opportunities are for a committed player in this field. “Committed” is not just showing up with a product list, however. The supply chain and who captures the margin and wields the economic power in this sector, need careful study and lots of investment.
Moving above ground again, Susan Ferenc, President of the Council of Producers and Distributors of Agrotechnology, gave us a remarkably in-depth look at the role of surfactants as adjuvants in agricultural formulations. A high-touch, specialized and high stakes business.
Staying with the food supply chain, Paul Peeble of our sponsor Lambent then outlined his thoughts on “Surfactants and Food – A Supplier’s Perspective”. This talk gave further solid perspective to the question “what have surfactants done for us?” A lot, in the area of food. Another high touch and highly regulated industry, with potential for reward to companies who know what they are doing.
No conference would be complete without a look at innovation in the field of sustainabllity. Long-time conference supporter, Zschimmer & Schwarz covered the field and introduced two fascinating multi-functional innovations which we are sure to learn more about in the coming months: Monoethanolamine Lauryl Sulfate and Zinc Coceth Sulfate.
Rounding out the conference, Elevance continues to impress with a solid review of the revolution taking place in chemicals and surfactants and their role in it. Nove, specialty and large scale in one packet. Plants in Indonesia and the US and a partnership with our kick-off speaker, Stepan. Great stuff on which to end a tremendous 30 hours spent together.
Our next event is in Berlin on September 4th and 5th. It will sell out, so I hope you will book now if you want to attend. For this conference we have put together a partnership with CEFIC affiliate Bio-TIC to bring you a three day event (for the price of two). A pre-conference on bio-surfactants followed by our Third ICIS European Surfactants Conference. Until then, keep revisiting this blog for our monthly market updates.
Budapest, September 13th and 14th
In less than two weeks over 100 thought leaders from the European surfactant industry will gather in Budapest for the 1st ICIS European surfactant conference at the historic Meridien Hotel. Some big names from the surfactant and consumer product value chain will speak, like Unilever, BASF and Brenntag The one and a half day event will include over papers and networking covering a range of critical topics for the industry and enable networking at the highest levels in one of Europe’s most beautiful and dynamic cities.
Over a year in the making, the conference will address five critical themes which affect the surfactant value chain in Europe, today. These are:
For each of these themes, the producers of the conference, ICIS and Neil A Burns LLC, have assembled the leading practitioners and analysts in the business to share their insights and experience with senior management delegates from all corners of the industry.
The strategy section will focus in on the critical question of vertical integration in the surfactant industry. This section will be teed up by a paper from me entitled “Attack of the 50 ft surfactant company”. If you want to know more about the title, register for the conference ! (50 ft is about 15 metres). The section will then include papers from ERCA / Emery, Kolb / KLK and SABIC. All companies aggressively involved in moving both downstream and into Europe from their home bases.
Sustainability is never far from the forefront and our conference will feature two very serious views view from two very credible companies. Their views may not entirely overlap. We have the worlds largest chemical company, BASF alongside the leading European green consumer product company, Ecover.
Feedstocks continue to challenge even the most seasoned surfactant supply chain veteran; probably more-so now than ever. To bring some clarity and insight to this complex area we have: Dow – talking about ethylene and EO, Farabi a relatively but very powerful player in LAB and Nexant, analyzing the entire slate of surfactant feedstocks of all types
End-users, markets and consumers ; is really the cornerstone of the conference. Here we bring in two of the worlds leading expert consumer consulting companies, Euromonitor and Mintel. They will focus on HI&I and Personal Care consumer markets respectively. A highlight of this section is a speech from Steve Holland the CEO of the world’s biggest chemical distributor. Brenntag is the bridge from many producers to many markets. Rounding out this topic is a unique insight from a uniquely talented member of the Unilever Company, Peter Smith.
This being a Hungary based conference, the Emerging Markets of Europe are a key element of the proceedings. Rhodia will talk about Russia and their efforts with Sibur and will speculate on whether indeed Russia is the next big market of opportunity. KOZMOS, the Hungarian trade association will guide the conference around the local market landscape for HI&I and PC surfactants. Saruhan, an up and coming consumer product company in an up and coming market, Turkey, will make a rare public presentation. PCC Exol, the local, Polish, surfactant champion, with global ambitions will also make a rare public appearance. Rounding out the conference; We have the Hungary based FMCG strategy specialist, Marco Monfils with a detailed look at the CEE consumer markets.
In addition to the stellar line up of speakers, our sponsors deserve a special mention for their support of this important event. Sponsors, who will also have many participants at the conference, include:
In summary, this event looks set to build on and, in some areas, surpass the success of the now well established world surfactant conference in New York. I am told that the conference space has been expanded after the initial allocation reached capacity. Registrations are now still being accepted. I am very much looking forward to seeing friends and colleagues there.
Steve Holland, CEO of Brenntag Addresses ICIS European Surfactant Conference, September 13 – 14th, Budapest.
On September 13th at Le Meridien Hotel in Budapest, Steve Holland, CEO of Brenntag, will speak at the ICIS European Surfactants Conference. The topic of his talk “Evolution of the Distribution Model on a Global Scale” will be of interest to anyone involved in chemicals distribution.
Mr. Holland, known as an outstanding speaker, promises to be a highlight of this conference which addresses one of the key products carried by any distributor, surfactants. By some measures, surfactants are the most popular products carried by distributors and Brenntag in particular has recently highlighted the renewable surfactants as well as the use of surfactants in shale gas exploration as driving sales volumes going forward.
Brenntag has distribution operations in nearly 70 countries; it offers more than 10,000 products at more than 400 sites; and it has 160,000 customers worldwide. These customers operate in markets including adhesives, coatings, elastomers, sealants, agriculture, chemicals processing, cleaning and detergents, food, metal finishing, mining, oil and gas, personal care, pharmaceuticals, pulp and paper, textiles and water treatment. All of these markets consume meaningful quantities of surfactants and complementary products.
Do not miss this opportunity to gain in-depth knowledge of a key distributor product line and to hear from one of the industry’s highest profile figures. Register here : www.icis.com/europeansurfactants
This announcement went out today and I felt compelled to share it with our readers. Distributors are a critical channel to market for surfactants and our partnership with the FECC in Europe enables us to bring the benefits of our surfactants conferences to their 1,400+ members.
ICIS Conferences and the Fecc (European Association of Chemical Distributors) today announced a media partnership around the series of ICIS Surfactant conferences, co-produced with Neil A Burns LLC.
The conferences are held globally in North America, Europe and Asia, with plans to expand to South America and Middle East. The next event as part of this series is the 1st ICIS European Surfactant Conference to be held in Budapest, September 13th and 14th. The CEO of Brenntag AG, Steve Holland, will speak at the conference. Further information and registration is available at www.icis.com/europeansurfactants
The conferences typically attract hundreds of senior managers from all points in the surfactant supply chain, representing companies such as Akzo, BASF, Brenntag Church & Dwight, Colgate, Croda, Dow, Ecolab, Johnson & Johnson, Kao, LG, Nexeo, PQ, P&G, Reckitt Benckiser, Rhodia, SC Johnson, Stepan, Univar and many others. The conferences are commercial in nature, focusing on market trends and economics along with in-depth studies of emerging technologies and geographies.
ICIS has a well established and successful business holding conferences and training courses globally in many chemical areas including petrochemicals, oleochemicals, and base-oils. Conference co-producer, Neil A Burns LLC, provides advisory and investment services in specialty chemicals with a particular focus on the surfactant value chain. The Fecc is the voice of the chemical distribution industry in Europe. Fecc represents around 1,400 companies serving a wide range of end-use industries including paints, detergents & toiletries, textiles to cosmetics and pharmaceuticals.
The First ICIS World Surfactants Conference
(May 12th and 13th Weehawken, NJ)
I was honored to chair the first ICIS World Surfactant Conference, which took place last week after about 7 months of planning between myself and the ICIS conference team. Based on the feedback I got from many people, whose counsel and opinion I value, the event was a success. The ICIS folks agreed and some preliminary planning has already been done around the next conference. Nothing has been finalized, but I can give you an early hint about one aspect. The venue will be much bigger! Why? Because last weeks conference actually sold out twice – even after getting more space – and the people on the waiting list are already vowing to register early next time.
To give you a flavor of what around 150 people experienced in the room over 11/2 days, I note below, the line-up of speakers and just one interesting point that I took away from each while chairing the conference. More comprehensive coverage of the event will no doubt appear in ICIS Chemical Business magazine over the coming weeks and in the ICIS Green Chemicals Blog, penned by our good friend and colleague, Doris De Guzman who pretty much live-tweeted the entire proceedings (complete with “twitpics”) from the front row.
Neil Burns of Neil A Burns LLC: I tried to give an overview of the key issues that would be explored during the conference – which I summarized as Value Chain, Volatility, Sustainability, Globalization and M&A. Not as catchy as Tom Nelsons “VUCA” but set the tone for the rest of the event.
Pascal Juery of Rhodia : Company is focusing on sustainability and growing regions of the world. They have been in Brazil for 100 years. Still lot of room to grow and consolidate as the specialty surfactant market is still very fragmented.
Bill Tittle of Nexant: North America set to become a net exporter of EOD’s as advantaged ethylene is converted to purified EO for ethoxylation.
Mohammad Al-Bibi of Farabi Petrochemicals: Farabi will commission a second 120 KMT/yr LAB plant in 2012 helping ensure the middle east remains a net exporter of LAB going forward.
Kongkrapan Intarajan of Emery Oleochemical: Emery’s aggressive growth strategy is driven by vertical integration (Sime Darby and PTT parents), Global Presence and Technology Access (recent ventures with Aekyung in Korea and ERCA in the Netherlands). By 2015, the business mix is expected to be 50:50 base oleochemicals : specialty derivatives.
Janet Crawford of Akzo Nobel: Tallow now costs 60% more than crude oil on lb for lb basis. At this point, expect to see demand destruction in surfactant markets.
Gillian Morris of Kline and Co. : $800 Million market for specialty surfactants in personal care with still 45% of that in Europe!
Jochen Flucht of Henkel: Henkel will play at all stages of the supply chain; including, for example, hedging kerosene for their LAB/LAS purchases.
Brian Chung of Rhodia: 100% naturally derived SLES, uses ethylene oxide made from ethylene derived from ethanol made from molasses via fermentation.
Tom Nelson of P&G: P&G is working with LS-9, Amyris, Braskem and others to try to mitigate the volatility and price pressures from traditional petrol and oleo raw material supply chains.
Icilio Adami of Desmet Ballestra: The new enhanced loop ethoxylation technology represents a breakthrough in terms of efficiency, throughput and capital cost effectiveness for ethoxylation.
Chris Cerimele of Houlihan Lokey: The surfactant industry continues to eb shaped by M&A. Western companies tending to divest oleochemicals while Asian oleochemicals companies tending to seek technology driven investments.
Alessandra Lancellotti of Frost and Sullivan: There are 15,000 companies in personal care in Brazil and the country is the number three consumer of such products in the world.
Bob Moser of Brenntag: Distribution is a fragmented market with plenty of room to grow. Brenntag has a 6.9% market share followed by Univar at 6.0% and Nexeo (formerly Ashland) with 2.8%.
Walter Rakitsky of Solazyme: Walt opened up the “surfactant revolution” part of the conference with a vision of designer oils produced via genetically engineered algae from a variety of biomass feedstocks. Technology is proven and being scaled up by this company that has already filed for a $100 Million IPO after being funded by VC and strategic investors.
Andy Shafer of Elevance : Andy rounded out the surfactant revolution with his vision of the Elevance metathesis technology as implemented in a series of biorefineries (180 KMT/yr first unit to commission this year in Surabaya). These plants to provide surfactant feeds from sourced uncoupled with crude or palm oils.
In summary, I was very pleased with the quality of speakers and participation by the delegates. Given that, I regarded myself as very fortunate to be able to chair the event and to work with such a talented team at ICIS in putting it together. Next year – a bigger venue and a continued focus on high profile, interesting speakers.
Chemical Distribution – Why so Attractive to PE Funds?
The recent announcement that TPG will acquire Ashland’s chemical distribution business was no surprise to most of the North American distribution community. What is noteworthy however, is that, again, a major chemical distributor has found a home in a private equity fund’s portfolio. Ashland now joins Brenntag (BC Partners investment – recently IPO’d), Univar (Clayton, Dubilier and Rice recently joined CVC as investors) and Azelis (3i) as a PE owned chemical distributor.
In addition to these large (USD Billion +) deals there have been a number of recent smaller deals in which PE firms have invested in chemical distributors. These include Post Capital’s investment in BHS and AEA’s investment in Reladyne. Reladyne is a consortium of four regional lubricant distributors.
Other deals in the distribution space are rumored to be in the pipeline and we’ll comment on those as they are announced. Coincidence? No. So, what’s the attraction of distribution for PE firms? In our view, it’s three major of factors:
The case for chemical distribution as an interesting investment is made fairly convincingly by the data in a paper by BCG, published earlier this year.
Looking forward, we see continued acquisitions by the North American big three, Ashland, Brenntag and Univar and by others. Consolidations driven by the scale related factors above will continue to be financed by these PE sponsored companies. Owners of small, regional and specialized chemical distributors may therefore find 2011 a good year in which to sell – or to compete in the interstices left between the ever larger market leaders.