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.

First ICIS Asian  Surfactant Conference  – Singapore

November 10^th and 11^th,  2011

This event was the second in our series of surfactant conferences co-produced by Neil A Burns LLC and ICIS and the first as part of our formal conference venture (the New York conference in May being a test run). Well over 100 senior executives from the Asian surfactant industry filled the ballroom at the Intercontinental Hotel in Singapore for two days of high quality papers and networking around the subject of surfactants, oleochemicals and feedstocks. Feedback was sufficiently strong that we have already penciled in the second Asian conference for November 1st and 2nd of next year in Singapore. Before then, of course, we have the second world surfactants conference in New York, April 24^th and 25^th and most likely, an event in Eastern Europe focused on that dynamic region.

As chairman of this conference, I had the privilege of introducing and listening to an incredibly strong field of presenters who brought forward subject matter and content, simply not available anywhere else. Listed below, is just one interesting point that I took away from each speaker. To get the full benefit – as I always like to say, you just have to be there..

Neil A Burns LLC: As noted, I chaired the conference. My traditional worry that attendees might tire of my voice, was not warranted. The quantity and quality of questions and debate from the floor was outstanding for each paper. Rarely did I have to contribute with a question of my own. One other takeaway for me was the quality of the attendee list with  delegates from all five continents and representing the largest manufacturers and users of surfactants globally, such as Kao, P&G, Lion, Henkel, Unilever, Colgate, Stepan, Huntsman, Rhodia, BASF, Air Products, KLK, Wilmar, J&J and many others.

Lion Eco-Chemicals: Tsunieharu Maukaiyama, President – Mukaiyama San opened up the conference with a highly engaging overview of how his company integrates surfactant development and production into a market leading line of Lion consumer products, sold throughout Asia.

Emery Oleochemicals: Anthony Feng, Global Head of Strategy – Anthony made a strong case for an industry shift toward vertical integration from feedstocks to specialty surfactants, a strategy being pursued by Emery most recently via their ethoxylation JV with ERCA in the Netherlands.

Indian Oil Corporation (IOCL): Mathew George, Chief Manager – Mathew points out that the LAB market will be in a net deficit soon (2013); thus leaving room for a major new LAB plant in perhaps Northern India (perhaps to be built by IOCL? – no specific confirmation on that).

Seng Chye Cheah (retd. Acidchem): Mr. Cheah’s review of oleochemical capacities, current and forecast, is probably the most comprehensive available today. Wilmar’s newly announced 150 KMT/yr alcohol plant in India is sure to shake up the market there.

Rohen Specialties: Norman Ellard more than lived up to his reputation as an informative and engaging speaker with real expertise. Noted a new ethylene oxide derivative requirement using 70% EO content for cement additives, pulling in a lot of EO.

Malaysian Palm Oil Board (MPOB): Zainab Idris gave the oil producers perspective with some interesting views on the use of Palm Oil in polyols. MPOB is Malaysias governments well funded and well organized palm trade body.

Kline and Company: Gillan exceeded even her top-ranked performance at the NY conference. She created some controversy with chart showing a 10 fold mark-up across the value chain from surfactant to personal care products. This engendered some  spirited debate with Vivek Sirohi of Unilever, and others.

Unilever (India): Vivek Sirohi, VP R&D pointed out that, in Asia, there is competition from non-surfactant invasive procedures (i.e. Botox) that will cut into surfactant volumes used in cosmetics and personal care.

Battelle Memorial Institute: Heliana Kola gave an outstanding detailed analysis of the composition of many leading Asian laundry detergents. Of note was the huge rise in enzyme usage across the board in 2009.

Galaxy Surfactants: Yogesh Kalra, leader of international business creation. 75% of the Indian shampoo market is still sold in “single dose” sachets.

Desmet Ballestra sPa: “The professor” Icilio Adami gave us all a college course on sulfonation – compressed into 45 minutes. MES indicated as a serious alternative to LAB.

Lazard Investment Bank: Matthew Knott – Vice President of Lazard the number one ranked investment bank in Chemicals – gave a comprehensive overview of M&A in surfactants and a fascinating study of how focus and scale drove shareholder value in Croda.

Frost and Sullivan: Krithika Tyagarajan, Director of Frost & Sullivan, drew some powerful correlations between the growth of various middle classes throughout Asia and the growth of surfactants volumes.

Brenntag: Henri Nejade, CEO Brenntag Asia Pacific – Every 2 seconds, Brenntag is delivering an order of chemicals to someone, somewhere in the world – an increasing number of them in Asis, where Brenntag has acquired a strong position.

Purac: Frederik Feddes, Marketing Manager, outlined the emerging use of a lactose backbones for high performance surfactants.

Solazyme: Tim Dummer, Senior Director of Business Development pointed that Algae can be engineered to consist of 80% of oil – with a chain length tailored to your needs (whether 12/14, 16, 18 – saturated or unsaturated) – exciting stuff for our business.

Elevance Renewable Sciences: Andy Schafer, EVP of Sales and Marketing – talked about the upcoming 180KMT/yr bio-refinery in Indonesia – JV’d with Wilmar –with big impact on the surfactant value chain in a number of areas (including laurics).

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.”

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.