Conference Report
ICIS World Surfactants Conference III
New York 2013, May 16th & 17th
ICIS and Neil A Burns LLC co-produced the 3rd ICIS World Surfactants Conference in New York, May 16th and 17th. It was the 7th conference in this global series and by far the biggest and most impactful yet.
Once again, I was privileged to chair the conference and to give some opening remarks to set the tone for the following two days. My remarks emphasized the much more challenging nature of business today vs 30 years ago in our industry. I also explored how you can shock-proof your business so that it even benefits from supply chain stress and disruption. To illustrate my points, I used videos from Monty Python, Kelly Clarkson and Dr. Who – as noted below. To really understand how these really do all tie together and make sense, I recommend you come to one of conferences later in the year in either Brussels (Sept 12th and 13th) or Singapore (November 14th and 15th).
Monty Python:
Kelly Clarkson:
Dr. Who:
Back to the conference: As billed, it comprised three summits in one, based around three themes of critical importance to the surfactants industry:
- Economics
- Consumers
- Technology
The Economics Summit:
First up in this section, Gillian Morris of Roland Berger gave a global chemical and economic outlook to 2030 in which she analyzed the near term future for the 2 Trillion Euro global chemical industry. Of particular concern is the downward trend in economic profit since the early 90’s (economic profit being Return on Invested Capital less the Weighted Average Cost of Capital). According to Gillian, some companies just don’t know how much their products are worth to customers and therefore under-price and under-realise the appropriate gross margin.
Returning for a second engagement with the conference, Doug Rightler gave a data packed and stimulating review of the EO and Derivatives Industry. According to Doug, China today determines directly or indirectly, the value of most of the chemicals on the planet. China today has 10 EO projects underway. Going forward, the US will be a prime location for manufacturing EOD’s but someone first has to bite the bullet and increase purified EO capacity, which is the current bottleneck.
A brand name in and of himself, Joel Houston of Colin Houston Assoc. reviewed the markets for LAB and detergent alcohols. Houston echoed the sentiment of Rightler regarding shortage of purified EO. He also predicted substantially increased vertical integration in the detergent alcohol value chain, much like in LAB.
Darrel Webber, leader of the RSPO – Roundtable on Sustainable Palm Oil, highlighted the human face of the palm oil industry by pointing out the millions of small-holders for whom palm oil is the only route out of poverty. Right now, about 15% of palm oil production is RSPO certified.
Nikola Matic of Kline gave highlights of their most recent analysis of the specialty surfactants used in the personal care market. Interestingly anti-aging products is the single largest segment of the personal care market and the largest influencer of ingredient development. Kline makes the case for consolidated and still rapidly consolidating specialty surfactant market. BASF, Rhodia, Clariant, Evonik and Croda are the largest suppliers worldwide. Some regional champions have emerged, like Galaxy Surfactants in Southeast Asia and Guangzhou Tinci in China.
Rounding out our Economics summit, Judith Taylor of ICIS Pricing outlined some analysis of key surfactants and feedstocks which are covered on a weekly basis by ICIS. Delegates got a free trial all the key reports with relevance to surfactants, i.e. fatty acids and alcohols, ethanolamines, EO, glycerine, LAB/LABS (Asia), PO.
The Consumer Summit:
The consumer summit examined the market from the point of view of major users of surfactants as well as the consumers themselves in the supermarket aisles. Implications for surfactant makers and sellers were presented by five companies operating directly at the front lines of the consumer markets.
Mike Fevola of Johnson & Johnson struck a perfect balance between the technical and economic with an exposition of new surfactant technology developed by Mike at J&J. These are hydrophobically modified polymers and polymeric surfactants. Great to see some surfactant innovation at the front end of the supply chain.
For the first time, Natura brought their unique perspective to our conference series from Brazil. In a talk on Surfactant Requirements for Cosmetics Industry, Sergio Gallucci outlined the 12 properties of the ideal surfactants. He also outlined the unique Agro-Forestry system that they use to source their palm oil.
Another company with a radical and unique perspective, Method (now part of Ecover, the Belgian company) talked about bringing green surfactant technologies to market. Kaj Johnson talked about their partnership with Segetis on Levulinic Ketals for solvency and more generally, discussed their development philosophy which includes the question “WWMD – What Would MacGyver Do?”
Mintel brought the full firepower of their consumer database to bear in reporting on consumer trends in HI&I products. In addition to highlighting the existence of a Tardis in the London office of Mintel, Lynn Dornblaser shared some interesting insights. For example, US consumers are much more brand conscious and loyal than Europeans. Also, in Latin America, Colombia distinguishes itself with the highest growth rates across a number of categories.
Rounding out our consumer section, two speakers from the Good Housekeeping Research Instituted, outlined the results of some original research, commissioned for this conference on The Voice of the Consumer. Not surprisingly, consumers are paying more attention to personal care and other ingredients. What came as a big shock to me is that “Sulfate Free” is now a top three item of concern with the consumers surveyed (a statistically meaningful group of 652 respondents who are members of the powerful Good Housekeeping consumer panel.
The Technology Summit:
The most popular summit of prior conferences returned with a selection of papers, presenting and analyzing the new technologies that are positioned, potentially, to turn the surfactant market upside down.
Renowned analyst, Ron Cascone of Nexant gave a thought provoking assessment of New Technology vs Old. Ron argued that it is in fact economically for certain companies to make ethylene from ethanol. He also highlighted an emerging class of syngas conversion companies in particular, OPX, Lanzatech and Kiverdi (see later).
Respected consultant, Andrew Soare of Lux Research gave an analysis of the state of bio-based chemicals in the surfactant supply chain. Surprising statistic (to me). 16% of sugar crops globally are going to bio-fuels and chemicals. This is forecast to double to 32% in the next few years.
A repeat presenter, Solazyme clearly stated that this is the last ICIS conference at which they will be talking about the coming commercialization of algal oil. This is because Q4, 2013 sees the start-up of their 100 KMT/yr JV plant with Bunge with Moema in Brazil. Interesting that a key initial market for SZYM’s high oleic oils will be the d-limonene replacement market.
A new name to our conference series, Kiverdi , outlined their syngas based process for turning waste into specialty chemicals, including surfactants. CEO, Lisa Dyson captivated the audience with a description of their whole cell bio-catalysis process with planned modular deployment at sites chosen for optimal feedstock availability.
Another new name to the series, Kieran Furlong of Virent talked about their novel technology for the production of – Bio-based Aromatics. Finally, a wholly bio-based LAB is within view. A truly amazing prospect for the surfactant old-timers in the crowd.
Fermentation specialists, LS-9 – made a return visit with a new speaker, Gary Juncosa, who presented their fascinating technology for the direct production of a range of surfactant intermediates from simple modified E. Choli. Feedstocks include first and second generation sugars and crude glycerine. Initial targets include fatty alcohols and esters.
The Capstone:
Pulling all three summit themes together, was the kick-off keynote address from John Foley of Solvay. Having recently combined with Rhodia, Solvay is now a leading global surfactant company, via its Novecare Business. Solvay’s Novecare supplies the full range of specialty surfactants across the globe and continues to grow both organically and via acquisitions. The keynote address highlighted some of the developmental challenges in building such a business. EOR and Agrochemicals received some airtime. Also the more general point of customer intimacy and service being key, but not on an “all you can eat buffet” basis. Have to be targeted and focused.