Surfactants Monthly Review July 2021
The Intro Section (not much surfactant news here):
Access your calendar and mark the following please: May 19 – 20th, 2022. The 12th World Surfactants Conference. Our current thinking is to do it again in Jersey City – where it’s been for the last 10 years. However, we’re open to ideas – such as Miami or Houston. What do you think? Rest assured that, wherever the venue, it will be at a first class hotel with superb facilities and of course the content will continue to be just what you want – and what you simply can't get anywhere else. It will be an event of friendly engagement, innovation, business-dealing and, yes, love. There I said it. And look, I know many of you, like me, engage in our daily business for money. But it’s not only for the money is it? There’s some other set of motivators and one of those is love. Love for the challenge, the technology, the surprises, the people – customers, suppliers, co-workers, even competitors. Here’s something I’ve been thinking about. I’ve listened to some podcasts recently on the subject of psychedelics (e.g. Lex Fridman – check it out). One of the effects of, say mushrooms or DMT is apparently a heightened more intense sense of a connection with the totality of humanity or, indeed with life or existence, itself. Connectedness and belonging. Sound familiar?
When I’m at one of our conferences – hear me out now – it really is made apparent to me the connectedness of our industry and its connection to life on this little piece of rock, protected by a flimsy atmosphere, hurtling through a hostile space. I’ll be standing there chatting over a cup of coffee to someone during the break and they’ll ask me who they could talk to about petrochemical and oleochemical alcohols and the relative pros and cons – and I’ll think for a second, turn around and say – “well this guy right here, actually, is a good place to start”. “Hey Peter, let me introduce you to Sonia from Unilever. She’s got some questions about ….” Connection made. Something happens – or not. But how cool is that ? OK – so what I am I saying – that our conferences are like an acid trip? Yes. (let us pause here while corporate counsel at my partners, ICIS, has a conniption). Except – they last longer – and in almost 12 years there have been no documented cases of a bad trip – not one.
You know, I’m actually quite serious. The sense of connection to something bigger and inherently good, is palpable at our events. And yeah – I’m saying inherently good – which is a bonus. What we do in our daily endeavors supports heath, hygiene, food energy – you name it. It’s inherently good – a kind of additional bonus good on top of the good of human connection in a one-ness beyond each of our individual egos. Is your blogger going all hippie dippie on you? I don't think so. We form connections in our families, with friends, at church – many places. Business connections are interesting because they don't care about race, creed, color, geography, gender, not even what football team you support. You get to interact with real people in an authentic way in pursuit of a common goal. Many of you will recall the first time Martin Herrington related the story of a surfactant molelcule as it started life in a palm plantation in Southeast Asia and ended up in your shower in Cincinnati. That supply chain is miraculous (his words, with which I agree) and involves thousands of people working independently but together. Connected in something bigger than any of them. Wow! Is there anything more psychedelic than that?
Back in June of 2019, I gave a talk at CESIO in Munich entitled Work Love and Surfactants. I asked a two-part question (with the help of Professor Samuel Hagar of the University of Van Halen), the second part of which was “how does it feel when it’s love” Answer: “It’s just something you feel together”. And I guess that makes sese because if only one person is feeling it, it’s maybe lust, infatuation, longing, attachment, but I don't think it’s love. That mutuality requiring some softening, but not elimination, of boundaries – that’s a pre-condition of love. And that’s what happens when we get together at events like ours in the pursuit of knowledge and opportunity. Always has. We didn't necessarily talk about it much. Maybe we didn't need to as it was so obviously understood. Well, here I am talking about it because, well, I don't know – It just struck me that all those cool things that psychedelics are supposed to do – like bring the unconscious up closer to the conscious and dissolve somewhat the ego in favor of super-conscious connection – well you can experience that in other, non chemically modified settings - like our events.
Assuming I haven’t scared you off – and I assure you the strongest thing served at the conference will be coffee – I’ll see you in May. It’ll be a trip.
The News Section ( this is probably what you came for):
Most and sometimes all, of our news is usually brought to you by ICIS. To get the full benefit of all this, you should subscribe, like I do. As of 8/2, I had actually let my sbscription expire (horror!) and so, for a few days, this blog was a shadow of its former self. However, as of today (August 8th), I am back in the saddle with the ICIS news and so we have updated news coverage. Of course, if you are reading this for the first time this month, then forget it and keep reading:
As reported by the talented and productive Samantha Wright of ICIS, European Fatty Alcohols players are expecting shortages to persist through the third quarter amid ongoing vessel delays and high freight rates. A large part of European fatty alcohols are imported from Asia, and this has caused issues in the market for the past several months. Coronavirus restrictions have resulted in vessel delays and seen freight rates shoot up exponentially.
Delays are already expected for August and September shipments and players expect the spot market to be very tight in the third quarter. The supply shortages have yet to impact previously contracted volumes for the third quarter, and most players expect more material will be available by the fourth. There are concerns, however, that if September shipments are further delayed, supply may be short heading into the final quarter. The upstream palm kernel oil (PKO) market has been very volatile recently due to a spike in coronavirus cases in Indonesia and Malaysia.
Meanwhile over in the Asia Fatty Alcohol market, ICIS’s brilliant Helen Yan reports that the market is likely to see decreasing supply in the near term following tightened lockdown restrictions to contain the resurgent virus infections in the region. Malaysia and Indonesia, which are major fatty alcohol producers, have seen soaring infections from the highly contagious Delta variant. Malaysian oleochemical makers Emery Oleochemicals and Southern Acids Industries have both declared force majeure (FM) on supply, according to customer notices seen by ICIS. “Sentiment is becoming more bullish due to supply cuts,” said a source at another regional supplier, which proposed a $30/tonne price hike for mid-cut C12-14 blend.
So – it looks like Indorama wins the contest for Oxiteno – and an excellent article by the legendary Al Greenwood of ICIS looks at things from Indorama’s point of view. Check it out here. Al points out that Thailand-based Indorama's pursuit of the Brazilian surfactants producer Oxiteno would be the latest addition in a string of acquisitions and construction projects that built up the company (i.e. Indorama) from nothing to becoming one of the major producers in North and South America. Oxiteno's owner, Ultrapar, confirmed in mid-June that it had entered exclusive talks with Indorama.
Al notes that Indorama entered the Americas market in 2003, when it acquired the StarPet PET plant in Asheboro, North Carolina. It was the first of many overseas plants that Indorama would acquire over the years. At the time of the acquisition, the plant had a capacity of 50,000 tonnes/year. Indorama would expand that site's PET capacity to 266,000 tonnes/year. It would build more PET capacity in Decatur, Alabama. The first line started up in 2009 and a second in 2010, according to Indorama. It obtained Decatur's feedstock from a nearby purified terephthalic acid (PTA) complex that was owned by BP at the time. Indorama would later buy that plant in 2016.
It made other deals to expand its PET capacity in other parts of North America.
In 2010, it agreed to buy INVISTA's PET plants in Spartanburg, South Carolina and Queretaro state in Mexico. In 2018, it agreed to buy a PET plant in West Virginia from the bankrupt producer Mossi& Ghisolfi (M&G). Far Eastern New Century ultimately won the bidding and acquired the plant in 2018. That same year, Indorama completed the purchase of M&G's PET plant in Brazil. Indorama teamed up with Alpek and Far Eastern New Century to form a joint venture that bought M&G's unfinished PET complex in Corpus Christi, Texas. That site would also produce PTA once it is completed. It is unclear when the joint venture will complete the Corpus Christi project.
Indorama would pursue other upstream acquisitions and projects, not all of which would proceed smoothly. In February 2012, it reached a deal to acquire Old World's EO and EG plant in Clear Lake, Texas, giving its US PET operations access to nearby feedstock. That same year, Indorama revealed that it was considering developing an ethane cracker in the US with a partner. This would further integrate Indorama's PET capacity with low-cost feedstock. At the time, many companies were considering cracker projects in the US, where the gap between ethane and naphtha prices gave that country's ethylene plants a huge cost advantage against much of the world.
The talks went nowhere, and Indorama would end up buying an idled gas cracker in Westlake, Louisiana from Occidental Petroleum. It signed the agreement in 2015.
At the time, Indorama expected it would resume operations at the plant in 2017. Instead, commercial production would not start until 2020, nearly five years after Indorama signed the sales agreement. In 2015, it bought a PTA plant in Montreal, Canada from CEPSA Quimica. On 6 January 2020, Indorama announced the completion of the $2bn acquisition of Huntsman's EO, EG and propylene oxide (PO) plants. That deal included plants in Port Neches, Chocolate Bayou and Dayton in Texas as well as Ankleshar, India and Botany, Australia. Indorama would later increase monoethylene glycol (MEG) capacity at Port Neches. The Huntsman plants also produced methyl tertiary butyl ether (MTBE) and surfactants. If Indorama acquires Oxiteno, then it would further build on that surfactants position.
I wish much success to Indorama. From what I am hearing, the price of the acquisition is a fair one and I alluded to this in a prior blog post. It is highly unlikely at this point that there will be any sort of bidding war for Oxiteno. With the Huntsman and Oxiteno assets, Indorama becomes a very serious player in the Americas for surfactants. And a new chapter in the story of this great industry begins.
Right at the end of the month, Stepan reported Q2 results: Operating income in the surfactants business fell 5% year on year to $45.9m in Q2, but the company’s overall net income rose, led by a higher profit in polymers. The decrease in surfactants was largely attributable to higher North American supply chain costs due to inflationary pressures and higher planned maintenance costs, Stepan said. Q2 polymer operating income rose 48% year on year to $23m, mainly due to a 44% increase in global polymer sales volumes.
Stepan, three months ended 30 June 2021:
| (in thousand $) | Q2 2021 | Q2 2020 | % Change |
| Sales | 595,511 | 460,549 | 29 |
| Operating income | 56,657 | 44,623 | 27 |
| Net income | 43,278 | 35,707 | 21 |
In a July 6th press release, Innospec noted that in March 2021, they completed a capacity addition at the Salisbury, NC site along with an adjacent new rail car handling facility which enables the company to receive raw materials and deliver finished product via rail. These investments serve to lower reliance on trucks, decrease supply chain costs, and reduce carbon footprint. Due to the strong demand for these mild and sustainability-focused products, in May 2021 Innospec approved a further $10 million capacity expansion that is scheduled to come online between late 2021 and the first quarter of 2022. These projects significantly increase Innospec’s SCI and Iselux® production capabilities and flaking capacity. The Performance Chemicals business is fast tracking further capacity expansions at its US and European sites including additional taurate production to meet global demand – according to the company.
Here's something really cool. Many of your will remember Arzeda, the enzyme company, presenting in New York at World Surfactants. They recently announced a partnership with Unilever to develop enzymes for household cleaning applications.
Many dish detergents and hard surface cleaners already use enzymes, which can break down soils, oils, and other grime as well as boost the performance of other ingredients. Enzymes, along with live microbes and advanced surfactants, are central to Unilever’s $1.2 billion plan to shift to 100% biobased ingredients for its cleaning products by 2030.
Neil Parry, head of biotechnology development at Unilever, told C&E News that the firm has the opportunity with Arzeda to look beyond the capacities of natural enzymes and into new kinds of enzyme-catalyzed cleaning chemistry. “Although detergents have been around for a long time with enzymes in them, the enzyme classes are quite limited,” he says, “and we believe there’s so many more enzyme classes that can get performance.”
Arzeda combines physics-based protein design with deep learning, a type of artificial intelligence, to improve enzymes or even build them from scratch. “Our impact on the field of enzyme engineering is improving the manufacturability and performance of existing classes, and then creating new classes of function, new modes of action,” says Alexandre Zanghellini, Arzeda’s founder and CEO. Arzeda raised $15.2 million in a series A funding round in 2017, and Zanghellini says the company has invested around $30 million overall in developing its platform and technology. The Seattle-based firm employs roughly 40 people “and is growing rapidly,” he says. About 35% of its research staff comes from a computer science background and the rest from chemistry and biology.
Just yesterday (July 30th) as reported by Indian Chemical News: Our good friends and supporters, Galaxy Surfactants Limited, announced the launch of a new Laundry Care offering of laundry pods under the ready-made blends portfolio of their recently launched Galaxy Hearth brand. Galaxy Hearth Mix Pods format of Laundry care solution is aimed at the Indian market, where e-commerce and established FMCG companies are looking to introduce the new form of Laundry care in a market dominated by Laundry Bars and Powders.
Galaxy Hearth Mix Pods is a ready mix concentrate for the preparation of Laundry Pods or Capsules. Powered by plant-based surfactants, the concoction prepared is carefully crafted to deliver adequate wetting, excellent cleansing, and detergency of soiled fabrics. Galaxy Hearth Mix Pods cleansing composition shows better detergency against Powder, Liquid, and even commercially available laundry pods. These pods offer convenience to consumers while being machine-friendly, aesthetically pleasing, and score high on sustainability. Pods reduce the need to be packaged in plastics. Also, their concentrated format ensures lesser fuel consumption during transportation than the presently available alternatives containing fillers or water. It is estimated that there can be a yearly saving of 36 MT of CO2 emissions from fuel for every 1 Lakh Household adoption to Pods.
Galaxy Hearth's 'one-stop solution ' value proposition promises to introduce innovative ingredients for the home care industry's modern era. The portfolio has sustainable solutions for applications such as laundry, dish-wash, hard surface care, and Institutional and Industrial Cleaning. "In an era of the well-informed and environment-conscious consumer world, radical shifts in the ingredient landscape are the need of the hour. Galaxy Hearth is conceptualized to set a benchmark in innovation within the homecare segment," Galaxy Surfactants Executive Director and COO, K. K. Natarajan, said.
Also, hot off the press on July 30th, P&G, a big surfactant consumer, got a new CEO, Jon R. Moeller who is succeeding David Taylor, effective November 1, 2021. Taylor will become P&G's executive chairman. He will lead the board of directors and provide advice and counsel to the CEO and P&G leadership on company decisions. Moeller joined P&G in 1988. He has been a member of P&G’s global leadership team since 2009, serving as chief financial officer, chief operating officer and vice chairman.
Shailesh Jejurikar, who currently serves as the chief executive officer of the company’s fabric and home care sector, has been elected chief operating officer, effective October 1, 2021. Jejurikar will report to Moeller, and his successor will be announced at a later date. So – much success to Jon. His Linkedin profile has him with about 34 years at P&G, starting as a cost analyst in the food area in 1988. It seems to be the only place he has worked. Who could forget his predecessor’s tussles with Trian Fund Management and its leader Nelson Peltz? A compromise was reached with Peltz joining the board of P&G in 2018. I wonder how Jon will get along with him - and vice-versa?
As initially reported in our March blog, India Glycols (Noida, India) and Clariant have now completed the creation of their 49/51 joint venture (JV) for renewable ethylene oxide (EO) derivatives. The JV will operate under the name Clariant IGL Specialty Chemicals. The JV company has approximately 200 employees. The JV will be led by Nitin Sharma, currently head of Clariant’s industrial and consumer specialties business in South Asia. U.S. Bhartia, chairman of India Glycols, will be the JV’s chairman. Two great companies and a very cool concept built around renewable EO. Much success to this new JV!
A little snippet from the specialty distribution space: Azelis, has agreed to acquire Coseal (Seoul, South Korea). Coseal specializes in the distribution, repackaging, and blending of agricultural and horticultural surfactants. The transaction is expected to close in the third quarter. Financial terms have not been disclosed.
Big news from the newly formed Verdant Specialty Solutions (which readers will recall is the old McIntyre, spun out of Solvay to the PE fund, Open Gate and now led by John Foley). In a press release, the company noted that it has acquired DeForest Enterprises and ParaFlow Energy Solutions from Chemical Services Group, a privately-owned US chemicals company. Through these acquisitions, Verdant’s portfolio of surfactants and specialty solutions for industrial, institutional and consumer segments expands.
DeForest Enterprises is a specialty surfactants company with a range of chemistries including low foam wetting agents, alkaline and acid stable surfactants, chlorine and peroxide stable surfactants, high and low foam amphoteric surfactants, hydrotropes, water-soluble corrosion inhibitors and phosphate esters. ParaFlow Energy Solutions provides unique products applicable to paraffin mitigation in upstream crude oil production and technologies for use in demulsifier applications to assist in solids and iron drop-out, as well as for the separation and recovery of valuable hydrocarbons from refinery slop oil and crude oil storage tank bottoms.
Together, DeForest and ParaFlow serve more than 100 customers in markets including industrial and institutional cleaning, metalworking and metal finishing, oilfield, pigments and inks, construction and auto care. Both companies are based in Boca Raton, Florida, and led by President Jeff Edwards. Edwards will join Verdant as Project Director and a member of the management team. He will be responsible for the integration of DeForest and ParaFlow.
By the way, if you missed Victoria Meyer’s interview with Verdant’s John Foley, here it is:
Here’s some great news from a relatively new surfactants company and no stranger to our conferences – that’s Sironix. Following is pretty much the whole press release:
Following the success of its recent over-subscribed seed funding round, Sironix Renewables officially celebrated several significant milestones in the company’s continued emergence as a premier eco-friendly cleaning product and personal care ingredients supplier. Sironix develops non-toxic, sustainably sourced ingredients for the cleaning products and personal care industries. The growing company hosted an in-person ribbon cutting ceremony recently that was attended by public officials, investors and other dignitaries at the company’s new headquarters in Seattle. During the celebration, Sironix unveiled its expanded development facility, held Sironix-led tours and product demonstrations, and formally introduced its newly formed strategic board of advisors.
“Having raised our seed round and put together a board in the early stages of a pandemic, it’s exciting to finally host our investors and advisory board in-person for such a pivotal moment in the Sironix trajectory,” said Sironix CEO and co-founder Christoph Krumm. “Our recent advancements in scaling from lab-scale to kilogram-scale quantities will enable us to rapidly grow our partnerships and launch our ingredient with cleaning and personal care product brands. Many thanks go to our incredible advisors who helped us emerge from a pandemic stronger and ready to change the way the world cleans.”
Commerce Assistant Director Michael Furze said: “Commerce supports the development of innovative technology that expands the bio-renewable and bio-degradable cleaning products market, and reduces energy consumption and emissions in the building sector. Washington state is renowned for its technical innovation and this project is a clear example of a successful partnership that contributes to broader State Energy Strategy Goals.”
Expanded Development Facility
The new 3700 sq. ft. facility houses the production and testing equipment that Sironix uses to develop its new ingredients with superior performance and safety. With its current team of nine, the company has unveiled its new production process to manufacture hundreds of kilograms per year in-house. With additional hires, Sironix will partner with producers of coatings, agricultural products and other fields where high-performance, eco-friendly surfactants are needed.
The new ingredient developed by Sironix is made 100% from plants and boasts superior performance in hard water and cold water, conditions which have conventionally challenged plant-based cleaners. Additionally, the ingredient has excellent skin mildness, which has led to a recent increased focus on skincare and personal care for Sironix. The company has numerous ongoing partnerships with cleaning and personal care product companies and plans to partner with chemical manufacturing partners as it scales production.
The company has received more than $5 million in grants and partnership funding, the most recent of which includes a $1.15 million Department of Energy grant, a $235,000 grant from the Washington state’s Clean Energy Fund, as well as a $1.1 million seed fundraising round. This funding has enabled the company to transition from bench-scale to pilot scale in its new facility and expand its partnership work with cleaning and personal brands toward launching better-performing, safer, and more environmentally friendly products. Funding from a recent funding round was used to scale production at the Seattle facility.
New Sironix Advisory Board
Sironix today also formally introduced its newly formed strategic board of advisors who bring deep industry experience in the cleaning, personal care and renewables space. The new advisors include:
· Andy Gilicinski: Former executive at S.C. Johnson & Son, Georgia-Pacific, The Clorox Company and The Gillette Company among other personal care companies
· Andy Shafer: Former executive at Elevance Renewable Sciences, Cargill and Dow Chemical Company
· John Venegoni: Former VP/GM of surfactants at Stepan Company, a global specialty and intermediate chemical manufacturer; and served on the boards of the Chemical Specialty Products Association and American Cleaning Institute
During the ribbon cutting celebration, the company also formally recognized and congratulated company co-founder Paul Dauenhauer on being named a recent MacArthur Foundation fellow. Dauenhauer, a professor at the University of Minnesota, was named a 2020 fellow for developing new technologies to convert renewable materials into chemicals used in products such as plastics, rubber, and detergents. The MacArthur genius grants are given to those who illustrate originality and creative pursuits in their field of study.
[My comment - That’s a great advisory board. I personally know each one and Sironix will have a blast with those guys. Huge congrats to the company!]
And one final piece of news from my alma mater, Pilot Chemical: As reported recently – the company is undertaking a multi-phase expansion of its proprietary ice-cold sulfonation technology at its production site in Ohio. The project is due to be completed by the second half of 2023. In addition, Pilot Chemical is evaluating additional expansion in alkylation. Two very core pieces of technology which support the company’s competitive advantage. We don't often write about ice-cold sulfonation here because the technology is essentially unique to Pilot. At almost 70 years old, great to see it continuing to add value.
So – to the end of the blog – which has become known as the music section. In keeping with our opening theme, I thought we’d stick with psychedelia. However, I really didn’t listen to a lot of psychedelic rock growing up, having gravitated early on to progressive and heavy rock. I remember a Tangerine Dream concert at Newcastle City Hall in 1978 where the band was literally not visible from the balcony due to the shear volume of smoke from the audience. The laser show was thereby incredibly enhanced though – by the smoke in the air, not the THC in the smoke - my drug of choice back then was brown ale. I also saw Steve Hillage around the same time. Slightly less smoke, similar vibe. He played this song – which has remained a favorite of mine. The Glorious Om Riff
You can see how this might appeal to a broad cross-section of hippies, prog rockers and those of us partial to a delicious guitar riff served up medium-rare.. But honestly one of the most psychedelic experiences I had in those days was in 1977 – By Tor and the Snowdog performed by you know who. Again, chemically augmented only by brown ale. Check out the 1976 version from All the World’s a Stage.
From the lyrics “The tobes of hades lit by flickering torchlight” to that bit starting at 1:50, to that huge chunk in the middle to that build up starting 7:50, to all those drum fills, all of them, to Alex to Geddy to the professor on the drum-kit. That’s why they are and always will be, the unofficial musical accompaniment to our surfactant conferences.
If not before, I’ll see you all next May.