Review of 2nd ICIS World Surfactant Conference

NYC – April 25th and 26th, 2012

I was again very pleased to be able to co-produce and chair the third surfactant conference in our series with ICIS. This time, we upgraded and expanded our venue – at the Grand Hyatt, Jersey City, with a stunning view across the Hudson River of the Manhattan skyline.

200 friends and colleagues from all parts of the surfactant value chain spent one and a half days listening to outstanding speakers and networking with each other in the breaks and drinks reception. The proceedings were reported in ICIS Chemical Business and, of course, in Doris De Guzman’s outstanding Green Blog, which live-tweeted essentially the entire conference. A special mention should also go to our friend Sarah Gorback at Elsevier, who tweeted extensively and was instrumental in supporting our partnership with “Focus on Surfactants” newsletter to which all delegates received a free subscription.

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 in Budapest, September 13th and 14th at the First ICIS European Surfactants Conference. Some of the links in my notes below may require a subscription to ICIS in order to view.

Keynote speaker, Mark Miller of BASF, gave a wide-ranging overview of that company’s challenges and opportunities in the field, pointing out that a balanced portfolio of renewable and petrochemical feedstocks is essential to the BASF’s success. He noted that refined EO is tight in the USA and speculated on who would take the plunge to invest accordingly.

Our M&A Speaker this time was the well known investment banker, Peter Young of Young and Partners. M&A activity is slowing according to Peter. The shaping of our industry, however, by M&A is likely to continue as opportunities for M&A abound in the surfactant value chain.

Martin Herrington of IP Specialties gave a stimulating and thought provoking overview of the fatty alcohol market, pointing out that “natural ” products’ growth may be hard to sustain in the face of cheap shale gas and ethylene in North America.

Next up was the widely known expert on EO, Doug Rightler, who proceeded to give a beginner’s crash course and advanced level seminar on EO economics – all compressed into 40 minutes. A highly rated speaker and sought after consultant, we were fortunate to have him speak at our event.

In the tradition of breaking some news at our conferences, Harish Davey of Reliance came to the podium and announced Reliance’s entry into the surfactants market in India – in order to support their growing consumer products and retail business. This is a huge piece of news and we were honored that Reliance chose our conference to announce it first.

After lunch, Victor Zubb of WheatOleo (a Soliance company) reviewed some interesting new developments in I&I cleaning ingredients. Biomass from wheat used in sophorolipid surfactants for I&I.

Rhodia’s speaker, Chris Houston (new to the company and a veteran of the industry) delivered some novel insights the oil and gas field and its importance for surfactants. Overall the oilfield chemicals market is worth $53Billion (!)

L’Oreal’s Jeanne Chang gave us a look inside the raw material innovations at the major global personal care company. She referenced the company’s adoption of the 12 principles of green chemistry and the outstanding work in glycoside chemistry in the Proxylane range of anti-aging products.

Heliana Kola of the Battelle Memorial Institute generated substantial discussion and debate around her presentation on the ingredients in laundry detergents in North and South America. Quite astounding, the impact of enzymes on the level of surfactants used in detergents.

Our focus on Latin America was kicked off by Todd Nelmark of Oxiteno. His survey of the surfactants markets in Mexico and Latin America was simply unique for a market heretofore little analyzed deeper than the macro level.

Colombia’a emerging palm industry was the focus of our next presentation. Colombia is the fourth largest palm producing country in the world, behind Malaysia and Indonesia (natch) and Thailand. Monica Perez was a stand-in speaker at the last minute and really opened our delegates eyes to the potential right here in the Americas for palm derivatives. Colombia is clearly in the running to be the “next Malaysia” just a few hours flight from Houston.

Wrapping up the first day, was Jim Heaney of Colgate, who gave us an encouraging but realistic assessment of the political challenges in South America, especially in Argentina and Venezuela and the cost pressures of doing business in the region where customers appreciate renewability but will not pay extra for it.

Opening up day two of the conference, I set the stage for the “What it Takes” mini-conference which took its name from a book by Richard Ben Cramer about the 1988 US presidential race. The book looks at the then candidates, Bush Sr., Dole, Dukakis, Hart, Gephardt and Biden and tracks the campaign through the lens of who really has what it takes to become president of the USA. In the same way, on our second day, we focused in on the leading new technologies in the surfactant supply chain and invited the delegates to consider who, if any, among them really has what it takes to impact our industry and become the “third leg” of the supply chain stool alongside petrochemical and oleochemical feedstocks. To tee up the discussion, we invited P&G and Seventh Generation to relate from their perspective what it takes to get an ingredient into their consumer products and onto the supermarket shelf.

After the challenge was laid down by P&G and 7th Generation, first into the lion’s den was Tim Dummer of Solazyme, a favorite of prior conferences, who reported on the continued solid progress of the company in commercializing engineered oil derived from sugars via the action of heterotrophic algae. THe company’s first plant in Brazil is slated for start-up in the second half of 2013.

Next up, Wei Huang of LS-9 described the company’s one-step conversion of sugars directly into oleochemicals, via enzymatic routes. A different approach to that of Solazme and very interesting to our delegates.

Another ICIS conference, regular, Elevance, then took the stage to update the group on their progress with their two announced bio-refineries, 180KMT/yr in Indonesia and 270 KMT/yr in the US. Ambiitious goals for their blend of commodity olefins and specialty building blocks derived via metathesis of vegetable oils.

BIll Rothwell of Codexis, a newcomer the ICIS conference speaker circuit, but with deep experience in the global surfactant supply chain, spoke next. They are entering the market for fatty alcohols with their Codexol brand product made from sugars via a microbial route.

My colleague, Patrick Foley, was next with a change of pace, getting in-depth with some novel, patented chemistry that has formed the basis of a brand new 6 month old company, P2 Science. P2 is commercializing a range of specialty ingredients, both novel and drop-in, for consumer products.

Last to enter the arena to convince the crowd that they had what it takes, was Amyris, ably represented by Frederik Ngatung. Amyris synthetic biology platform seeks to employ the versatile farnesene intermediate to enter the fatty alcohols market in the near future.

In summary, I can say that I have never enjoyed myself more at an industry event. It was again and honor to chair a meeting as content-rich and important as this and I hope the delegates got as much out of it as I did. Registration for Budapest , September 13 & 14th is open now. I am told the venue is outstanding and that we will sell it out. I hope to see more friends and colleagues there.

ICIS / Neil A Burns LLC – Surfactant Conferences Venture

I was very happy to see our company release the following news item late on Friday. This new venture comes out of the success of our surfactant conference produced with ICIS in New York in May. I am looking forward to seeing many friends and colleagues at future events, including the First ICIS Asian Surfactant Conference in Singapore, November 10th. I also encourage your feedback regarding content, format and location of these events going forward.

NEWS RELEASE: Neil A Burns LLC
For More Information Contact:                                                      FOR IMMEDIATE RELEASE
Neil Burns: Tel +1 (732) 303 -7164
Managing Partner
Freehold, NJ
07728, USA
www.neilaburns.com
neil@neilaburns.com

July 20, 2011

Location: Freehold, NJ

REED BUSINESS INFORMATION LTD. (RBI) OF THE UK AND NEIL A. BURNS LLC OF THE USA HAVE ENTERED INTO A LONG-TERM AGREEMENT TO CO-PRODUCE CONFERENCES AND SEMINARS IN THE FIELD OF SURFACTANTS.

The conferences and seminars will be held globally in North America, South America, Europe, the Middle East, and Asia. The first event as part of this agreement will be the First ICIS Asian Surfactant Conference to be held at the Intercontinental Hotel, Singapore on November 10^th and 11th 2011. Further information and registration is available at www.icis.com/asiansurfactants

The agreement follows the two companies’ successful collaboration on the First ICIS World Surfactant Conference in New York in May 2011. The conference attracted over 150 senior managers from the surfactant industry with attendees and speakers representing companies such as AKZO, BASF, Church & Dwight, Colgate, Croda, Dow, Ecolab, Johnson &Johnson, Kao, LG, PQ, P&G, Reckitt Benckiser, Rhodia, SC Johnson, Stepan, and many others.

RBI, via their ICIS subsidiary, has an existing successful business holding conferences and training courses globally in many chemical areas including petrochemicals, oleochemicals, and base-oils. The company notes that the agreement with Neil A. Burns LLC enables them to expand their conference activities into a new key market with significant global potential.

Neil Burns, whose company Neil A Burns LLC has an existing business providing advisory and investment services in specialty chemicals with a particular focus on the surfactant value chain, will play a key role at the surfactant events as chair and/or speaker. Regarding the upcoming Asian conference, he states, “Due to the success of the first ICIS World Surfactant Conference in New York, earlier this year, we have been asked by many industry players to bring the conference to Asia. We are excited to be holding this event in the middle of the fastest growing, most dynamic surfactant market in the world today.”

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.

North American Ethylene –the Impact on Surfactants

(April 15^th Racemics Meeting)

I was fortunate enough to be invited to a meeting of the Racemics club in NJ recently and was further fortunate to hear an outstanding talk by TIson Keele of CMAI on the future of North American manufacturing in the ethylene value chain. The talk was fascinating and, true to form for Tison, gave concise insights into what really matters for the chemical industry. Overall, shale gas in North America is going to help ensure that we have an advantaged feedstock position here for ethylene derivatives for the next few decades.

What I found particularly interesting was the expected impact on the surfactant industry – which I think will be significant. Consider the following:

• While oil is an important part of the supply chain, only 7% at best of crude oil ends up in chemicals (most of that polymers). 93% is used in fuel
• Natural gas is now the feedstock of choice to make ethylene in North America, the Middle East and Southeast Asia. Europe and Asia/Pacific still tend to rely on crude oil/ naphtha feeds. This is now putting these regions at a serious cost disadvantage to North America in particular due to the historical low cost natural gas in North America. Historically, there has been a 6 – 7:1 energy equivalency multiple of crude oil to gas. Today it is around 20:1.
• This cost advantage is fairly recent and the industry has not caught up. The newest ethylene cracker in North America as built 12 years ago. With an average 30 year cracker life, there seems to be pent up “demand “ for new cracking capcity in North America.
• Recent announcements by Chevron and, just today, most specifically from Dow plus discussion around Westlake and Formosa Plastics, suggests at least one (Dow), if not all four will add ethylene capacity in the US in the next few years. Notwithstanding new plants, many existing plants are debottlenecking to take advantage of their newfound competitive position.
• Given the expected improvement in North American ethylene cost and availability, there is an accompanying renewal of interest in expanded and even, new ethylene oxide (EO) capacity. Ineos recently has publicly mused about putting EO capacity in North America, to complement its olefins and ethanolamines capacity in the US and its leading position in Europe in EO. Such a move would add a significant new EO player in North America. Dow of course is already in EO in the US and recently re-directed significant capacity in Taft from MEG to EO.
• Approximately 77% of EO goes into making glycols (MEG, DEG and TEG) for PU, textiles and other applications. The other 23% is purified to ethoxylation grade and used in the production of surfactants.
• Therefore the outlook for purified EO costing and availability to support ethoxylation in North America is positive. It looks likely that the work around EO expansion is to be accompanied by work around expanding ethoxylation capacity in North America.
• The prospects therefore for the surfactant industry look robust in North America with much of the potential expanded ethoxylation capacity being directed at ethoxylates and ether sulfates for export markets.

Kudos and congratulations again to Tison for an outstanding talk.  It will be interesting to see how these supply chain related themes are addressed at the First ICIS World Surfactant Conference on May 12 / 13^th in NJ. Many of the companies there are operating in this and related areas throughout the world.