What is P2 Science, Inc.?

So what is all this about P2 Science, Inc.?

P2 is a brand new surfactant company formed in November by Yale scientists, Elm Street Ventures, an early stage venture fund and me (the founding CEO). The company is using patent pending technology from the Yale Center for Green Chemistry and Green Engineering to develop and manufacture a new class of high performance surfactants, C-glycosides (CG’s). P2 owns the exclusive global license to this technology. CG’s find application in a range of consumer and industrial products such as detergents, personal care products, cosmetics, lubricants, hard-surface cleaners, emulsion polymers, mining, environmental remediation and oilfield chemicals, and many other areas.

The new surfactants are mild in use, stable, customizable, and manufactured in low energy-intensive conditions. Patrick Foley, the lead Yale inventor in the C-glycoside field, is P2′s Chief Scientific Officer. The company has set up a laboratory in New Haven to continue development of the initial surfactant product range and has commenced discussions with partners and customers in a number of key end-use markets.

P2’s website has a lot of information on the company, technology, management team and investors. There is also a calendar page that lists the speaking engagements so far for the coming year and the exhibitions and conferences in which P2 will be participating. Links and brief information are provided for each. I personally look forward to seeing old friends and new at these events and to discussing this exciting new development in the field of surfactants. Calendar highlights in the coming year for P2 include the 2^nd ICIS World Surfactant Conference, April 25-26^th in New York in which P2 will be presenting their technology alongside such giants in the renewable chemicals field as Solazyme, Elevance, Amyris, LS-9 and Codexis. We are genuinely honored to be in the company of such a stellar line-up of companies who are transforming the surfactant supply chain. We are also looking forward to the March 1^st Green Chemicals Panel discussion hosted in Manhattan by the CM&E Group of ACS.  Full details of the P2 2012 Calendar are on this new page to the P2 site. Check back frequently as new engagements are being added on a regular basis.

CESIO Surfactants Conference, Vienna Austria, June 5 – 8th

This previously quadrennial event, altered its schedule and took place 3 years after Paris before settling into a biennial rhythm going forward (so, next one is 2013 in Barcelona). Incidentally, the next major conference in the surfactant world this year is now the First ICIS Asian Surfactants Conference, November 10th and 11th in Singapore. My company is co-producing as part of our conference business venture with ICIS.

At CESIO, I presented a paper at the Tuesday morning “Market Trends” session entitled “Biomass – a  new feedstock value chain for surfactants”. It was quite well received. Most of the questions following the paper centered around cost effectiveness of the current technology and whether or not this was a high cost niche. My answer; there is no green premium when it comes to this segment. The market has a need for a viable, third leg to the value chain (as outlined in our recent INFORM article) and cost competitiveness is essential.

Some highlights of themes emerging and events happening at the convention:

First a couple of announcements that hit the wire during the conference:

• Rhodia announced a JV with Sibur in Russia for the production of surfactants. It is expected that Sibur will supply ethylene oxide to the JV for the production of ethoxylates.
• Shell announced an intention to explore a world scale ethylene plant in the Appalachian region of the Northeastern US, taking advantage of the ethane rich, locally available Marcellus Shale gas deposits. The project is said to include derivatives, most likely polyethylene. This has significant relevance for the surfactant industry as, of course, a small part of this ethylene could be available for the production of ethylene oxide for use by ethoxylators. Elsewhere in this blog we has discussed the coming advantages for US based petrochemicals producers based on the use of shale gas derived ethane. Even now, North America is the second lowest cost region for ethylene manufacture, globally.

Some Conference Highlights:

• Henkel CEE (Central and Eastern Europe) discussed the diversity of their markets in Eastern Europe and introduced an index relating to how many minutes of work, on average, it took the average citizen in each of their markets to earn enough to buy a 400 g package of Persil detergent. The number ranged from 5 to 135, which underlines the marketing challenge even within a single region.
• Novozymes continues to be a huge presence at these types of events. Interesting that, at a surfactant event, one of the key participants is a company whose products enable the reduction of surfactant loading in cleaning formulations.
• The Battelle Institute gave an interesting analysis of the markets for laundry detergent in the US and Europe and the differences in formulations between the two regions. Lots of detail. One of the more interesting points is that European formulations, in general are more complex with a greater variety of ingredients. Should we read more “sophisticated” Europeans?… who’d a thunk it.
• Shell presentation on high active (90%) blends, helpfully dubbed “HAM” (high active materials), suggested a much higher reach for the shipment of surfactant from integrated sulfonation and ethoxylation sites to detergent manufacturers.
• EOR (Enhanced Oil Recovery) got some coverage at the conference. Not only affirming it’s status as the next big thing in surfactants (a status held by EOR for at least 25 years), but also evidencing some considerable expenditure of time and money in the field. I was particularly gratified to hear the proceedings of our very own first ICIS World Surfactant Conference quoted by a speaker – and by none other than a BASF speaker, Dr. Alfred Ruland of BASF Germany. Dr. Ruland cited Pascal Juery’s comments at our conference around the importance of EOR to Rhodia. Nice to see.
• Methyl Ester Ethoxylates got some heavy billing from both Huntsman and KLK. Elsewhere, including on the sidelines, Methyl Ester Sulfonates continued to generate buzz as the production technology offered by, among others, Ballestra continues to establish itself with multiple players, especially in palm-rich Southeast Asia.
  • An interesting statistic put forward by Huntsman is that they have supplied 15,000 MT of Methyl Ester Ethoxylate to the North American heavy duty laundry market last year.
• Solazyme made its debut at the conference (and in fact the debut of the entire “new renewables” industry), with a well-attended and thought provoking paper. The company introduced its technology and made its case (very well) that this technology is slated to have a major impact on the surfactant value chain. I especially liked the picture of the Solazyme railcar – emphasizing the point that “yes we are at commercial scale here!”. Nicely done by Tim and his colleagues.
• Oxiteno, continued to step onto the world stage with a nice survey of the Brazilian and Latin American markets presented by Andre Polo. Some interesting nuggets included the 30 Million Hectares of land devoted to Oil Palm and the 30 Billion barrels of crude oil reserves in Brazil. Another fascinating statistic is that Brazil is the largest market for hair conditioner in the world. Yes, Brazilian women really care about how they look!
• A member of the Japan surfactant industry association gave a very detailed survey of the surfactant market in Japan. One thing that struck me, although I sort of knew it already, is that the market there has been shrinking yearly since 1990!

So, overall, a great meeting with lots of informal interactions around the exhibit hall and at lunches and dinners in Vienna. The closing event at the outstanding “Rathaus” (Vienna’s townhall) was really first class. My gut tells me that the speaker line-up at the next CESIO will include many other renewables companies, Solazyme having blazed a trail there. Further discussion of EOR and of the new value chain co-operations emerging around integrated ethylene, EO, ethoxylation and sulfonation sites, especially in North America will also likely be featured.

That’s almost it for the Summer for me on the speaking circuit. I have one more paper to give at the ACS 5^th International Conference on Green and Sustainable Chemistry in Washington DC June 21-23. Next stops will include Cartagena, Colombia in October (AOCS) and Kuala Lumpur, Malaysia  in November (PIPOC) and of course, the First ICIS Asian Surfactants Conference, November 10th and 11th in Singapore . Stay tuned to this blog or to our Twitterfeed (@NeilABurns) for information as it becomes available.

The First ICIS World Surfactants Conference

(May 12^th and 13^th 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 1^1/2 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.

The Green in Green Chemistry

March CM&E Lunch Report

The ACS York CM&E group hosted another outstanding lunch last Thursday at the award-winning Aureole restaurant in New York City. The theme was a panel discussion on green chemistry and we were honored to have as co-moderator the ICIS Green Blogger, herself, Doris de Guzman. I was the other moderator and the panel was a tremendous mix of banker, mature company and new company – i.e.

• Chris Cerimele, head of chemicals at Houlihan Lokey
• Bob Barclay, co-founder of Martek
• Jason Anderson, VP Business Development, Novomer

A remarkable feature of the session was – no powerpoint! It may be just me but I get the impression that people just simply pay more attention when there are no slides. We had a rapt audience of over 50 in the room and another 10 or so on the webcast.  Just a sample of some of the highlights of the discussion:

• The “green premium” – what will consumers pay for and how much will they pay to be green? – Answer: Zero. These businesses have to bring value to consumers in terms of product performance and cost – just like any other product. That was the unanimous conclusion of our pane.
• Europe – leading the way in green businesses? Not exactly – in many ways Europe is jealous of the robust capital and intellectual markets that allow new businesses to flourish in the USA.

If you missed this lunch, you have an opportunity every month – the first Thursday – to join us. On April 7^th, we have a presentation on Growth Opportunities in Specialty Pharma by Michael Higgins, Managing Director of Rodman & Renshaw. In May, we have the long awaited Latin American event, sponsored by CM&E’s own cachaça distiller, Sagatiba of Brazil (yes, that is free caipirinhas for all attendees  – and we haven’t yet figured out how to deliver those via the webcast). Senior executives from Blackrock Latin America and Petrobras will discuss opportunities in Brazil and Latin America in general.

Chemical Industry -  Economic Outlook 2011

(per the American Chemistry Council)

Dr. Kevin Swift, Chief Economist at the American Chemistry Council gave a riveting presentation to a packed house at yesterday’s lunch meeting of the CM&E group. A crowd of 80 chemicals executives, bankers, investors, lawyers, consultants and other service providers heard data-packed and highly useful analysis of where we are in the chemicals cycle and where we go next. The lunch audience, including senior members of BASF, Rhodia, Lonza, Helm, Mitsui, Lonza, Huber and DSM was joined by webcast attendees from across North America, Europe and Asia. Hard data and concise opinion was served up with grace and humor and everyone went away with something they would use in their chemicals activities in the coming year.

And  before you ask, no I cannot send you the slides and yep – I have to say again– you really do “gotta be there”. However, in this case, I am told you will soon be able to purchase access to a recording of the webcast, with the slides, here. In coming months I urge you to come to some of these meetings as we have BASF speaking in February, a Green Chemistry panel in March and in May, the long awaited Latin American event, sponsored by CM&E’s own cachaça distiller, Sagatiba of Brazil (yes, that is free caipirinhas for all attendees  – and we haven’t yet figured out how to deliver those via the webcast).

Some bullets from Kevin’s talk to give you a flavor of what we enjoyed:

• We are about 25% of the way up between last year’s trough and the next peak for our industry.
• Car manufacturing recovery and growth particularly in China pulls along a lot of chemicals – about $2,400 worth of chemicals per car.
• Housing is an issue. We have a double dip here in the US and that is a concern as each new house is worth about $17K in chemicals. In addition, household debt is climbing at a rate that suggests a reckoning has to come due and the risk for the US economy cannot be ignored.
• Shale gas featured very prominently in the talk and Kevin’s view of this as a game changer for North American Chemicals was very well received. A number of off-line discussions I had at the event, confirmed that serious investment decisions will be made with the shale gas economic effect on the chemical value chain – a huge factor.  By the way, I have to add that the networking, pre and post the talk –  at this event was outstanding.