This article was published on June 18, 2014 on SpecialChem4Bio.
Introduction: About NatureWorks
Since some years now, everyone keeps talking about plant-based chemistry and industry. To see things more clearly, Mr. Steve Davies, Director of Public Affairs at NatureWorks, agreed to answer some questions regarding past evolution, trends and challenges for bio-based industry and bioplastics.
Steve leads marketing & public affairs globally for NatureWorks LLC, a company formed with the mission of bringing to market a broad family of naturally advanced, renewably sourced materials. He is responsible for the company’s cradle-to-cradle strategy, including feedstocks sourcing and strategy, product recovery strategies, and for managing the company’s external communications and media relations.
Previously as NatureWorks’ global marketing director, Steve was responsible for market development with Ingeo plastics in rigid and flexible packaging, food service-ware and durable goods, and with Ingeo fibers in apparel, personal care, home and garden.
1. Does bio-based chemistry have a strong place in the global chemical industry now or is it still a fragile sector?
Bio-based chemistry has a secure place in the world market, if not a large one. Infrastructure, competitive product price, market demand are all favorable for sector growth. Since 2005, NatureWorks has shipped 1 billion pounds of Ingeo™ bio resins and lactides.
The best way to judge long term growth potential is to consider the key underlying factors of channel development, material performance, price, feedstock diversity, and manufacturing capabilities. For Ingeo biopolymer, all of these factors are positive. The channel is energized, competent, and developing significant innovations. The grades of Ingeo today are really much more diverse than when NatureWorks started in terms of performance and range of applications.
During this past year, NatureWorks introduced new high performance grades for durable products, nonwovens, and lactides. NatureWorks has a clear feedstock diversification strategy to broaden beyond current industrial corn sugar-based feedstocks. For example, the company has a long term R & D effort looking into direct conversion of methane into lactic acid, the precursor to Ingeo. If Methane conversion does prove to be commercially feasible, NatureWorks anticipates the process will structurally simplify the Ingeo manufacturing route. Engineering work is proceeding on a second global scale manufacturing plant.
We did not envision quite this much maturity when the first Ingeo shipments were made a little more than a decade ago.
2. Which trends do you see in the evolution of the bio-based products demand?
The big trend is that Ingeo is competing on its merits as a resin, not as a green product. Ingeo is competing with other materials on performance, price stability, competitive price, and low carbon footprint. Relying simply on green credentials does not work in the long run in terms of market viability.
For example, form-fill-seal cups like those used for yogurt packaging require less material when made from Ingeo, not polystyrene. Those cups perform wonderfully. There is strong interest in Ingeo due to this performance. In the 3D printing market, Ingeo is recognized by a large segment of users and manufacturers as a preferred material. Performance again is the key.
Feedstock diversification is another trend leading to growth. Fossil carbon is a finite resource. Ingeo can be made from a host of different resources. For example, sugarcane or cassava will be the next feedstocks for the company’s second Ingeo plant. That plant will be located in Southeast Asia. In parallel, NatureWorks is investing in a joint technology development program with California based Calysta on the feasibility of Methane conversion.
The feedstocks used for Ingeo lead to price stability, not volatility as in the fossil carbon market. Customers appreciate knowing that they can make long term plans based on a stable price for their polymers and lactides.
One trend that has gone unnoticed is the enthusiasm of the channel. More companies every year see the potential to differentiate themselves in the market by eliminating or reducing fossil carbon. NatureWorks sees rampant innovation in the channel in terms of blends and additives. Converters are creating new products with the new blends, additives, and NatureWorks’ expanding range of high performance resins.
3. In your sector of activity, what are the biggest challenges or barriers for the adoption of new bio-based products?
Misperceptions around cost are sometimes an issue. Much progress has been achieved in making Ingeo cost competitive with conventional fossil materials, even though we are competing with entrenched materials where start-up costs have long been a non-issue. Our downstream channel to market is doing a good job in achieving great economies of scale and bringing their costs down, which puts Ingeo finished products into the competitive range in a number of applications.
Misperceptions around Ingeo recyclability remain. Ingeo has long been efficiently recycled at the post-industrial level, and we have a range of products underway to start recycling at the post-consumer level.
4. Bioplastics are growing fast but the market penetration is still low. What has been your strategy to grow its market share?
We focus closer to home on growth rate of the Ingeo grades that we make. Over the last 8 years, we have achieved a compound annual growth rate (CAGR) of 24%, and we expect that trend to continue, if not accelerate – indeed, that is one of the reasons we signed a contract with world class engineering company Jacobs Engineering last Fall to provide the front-end design for our second facility.
5. We see more newcomers in the bioplastics market. Which assets does NatureWorks have (or will need to develop) to keep its place as a key player in the future?
When Coca-Cola launched its partially bio-PET “Plant Bottle” by replacing one of the two PET monomer building blocks with a bio-based version to achieve 20% biobased carbon in the final product, we were asked how that would hurt our business. In fact the development was a boon to business because one of the world’s most widely recognized brands was embracing biobased polymers. It was an implicit endorsement for biobased plastics.
The more companies producing biobased polymers the stronger the channel, the lower the cost, and the higher demand. Competition in this industry is a spur for growth. We are convinced that there is room for multiple new players and technologies. At the same time, leading edge innovation is embedded in our company DNA. NatureWorks has applied for more than 500 individual patents, of which more than 300 are already granted. We continue to innovate – as the examples above demonstrate – with new feedstock conversion technologies, manufacturing process improvements, new Ingeo lactide and resin grades, or new applications in the market.
NatureWorks LLC is a company dedicated to meeting the world’s needs today without compromising the earth’s ability to meet the needs of tomorrow. NatureWorks LLC is the first company to offer a family of commercially available, low-carbon-footprint Ingeo™ lactides and biopolymers derived from 100-percent annually renewable resources with performance and economics that compete with oil-based intermediates, plastics, and fibers, and provide brand owners new cradle-to-cradle options after the use of their products. NatureWorks is jointly owned by Thailand’s largest chemical producer, PTT Global Chemical, and Cargill, which provides food, agriculture, financial and industrial products and services to the world. For general information on Ingeo, visit www.natureworksllc.com.
Ingeo and the Ingeo logo are trademarks or registered trademarks of NatureWorks LLC in the USA and other countries.
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