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FATS AND OILS: Trends and opportunities in the industrial and chemical markets

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Glycerine and FA. Fats and Oils Use. Inedible Products use. Yearly Inedible oils consumed. Chart5. Table 1a. Selected Items of Fats and Oils Consumption, Seasonally ... – PowerPoint PPT presentation

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Title: FATS AND OILS: Trends and opportunities in the industrial and chemical markets


1
FATS AND OILS Trends and opportunities in the
industrial and chemical markets
  • International Castor Oil Association
  • General Meeting
  • San Diego, May 18, 2005
  • By
  • Doris de Guzman
  • Associate Editor
  • Oils, Fats Waxes/Consumer Specialties

2
(No Transcript)
3
Changes are on the horizon
  • Costs of crude oil and fuel remain high
  • Continued price increase in petrochemical-derived
    ingredients
  • Manufacturers looking for alternative raw
    materials
  • Growing importance and use of biotechnology
  • Consumer preference for naturals
  • Growing trend in green chemistry

4
Rising price of crude oil expected to continue
Source USDA Agricultural Baseline Projections
2006
5
Prices of petro-based chemicals still at high
levels
Source ICIS Pricing
6
Vegetable oil based-materials are becoming more
competitive
7
Vegetable oils Growing source as an alternative
feedstock
  • Renewable raw materials
  • Expanding global oilseed production
  • Government subsidies and incentives
  • Increasing regulation for synthetic/petrochemical-
    based ingredients
  • Increase in RD for vegetable oil-based
    industrial products and fuel
  • Increase interest from traditional petro-based
    manufacturers

8
US fats and oils consumption in inedible products
9
US inedible use of selected fats and oils, 2005
10
Biodiesel will fuel vegetable oil consumption
Source National Biodiesel Board
11
Soybean oil, canola, yellow grease, tallow and
recycled cooking oil are the preferred feedstock
for biodiesel in the US
Source National Biodiesel Board
12
Rapeseed oil demand for biodiesel skyrockets in
Europe
More than 90 of the recent growth in the EU-25
demand for fats and oils is for biofuels
-Oil World (February 2006)
13
Biodiesel will drive stronger use of palm oil
Malaysias industrial use of palm oil in 2005/06
is forecast at 1.9 million tons, up 8 from the
previous year, supported by the countrys ongoing
efforts to promote palm oil as an alternative
fuel source. -Foreign Agricultural
Service (USDA-FAS)

14
Rising biodiesel projects in Malaysia
Malaysia Biodiesel Initiatives
Companies Capacity (tpa) Details
Golden Hope Plantations Carotino Sdn Bhd IOI Corp. Kumpulan Fima/MPOB Kulim Bhd FELDA IJM Plantations Zoop Sdn Bhd (private equity) Vance Bioenergy Mission Biofuels 150,000 60,000 150,000 60,000 100,000 na na 100,000 na 100,000 4 new biodiesel plants, operational by 2007 Operational in mid-2006 Details being worked out Operational in 2007 JV with German company, start-up in 2007 Undertaking feasibility studies No details. Planning to invest RM50m In Selangor, has multifeedstock capability In Pasir Gudang, to commence in 2006 Kuantan Port. Operational in October 2007
Source Citigroup Research (1/4/06) and various
news sources
15
Brazil joins the biodiesel race
BRAZIL BIODIESEL PROGRAM
Federal Law 11.097, 1-13-05 Authorization of a
voluntary 2 blend of biodiesel (B2) until 2008,
when B2 will be mandatory. The blend will
increased up to 5 until 2013. Federal Law
11.116, 5-18-05 Authorizes tax exemption and
incentives for biodiesel based on the kind of
feedstock, size of producer and location of
feedstock region.
Brazil can become a major world producer of
biodiesel with its vast amount of arable land for
oilseed feedstocks such as castor, sunflower,
soybean, palm and cotton
- ABIOVE (Oct. 05)
16
Brazil is projected to consume over 2 billion
liters of biodiesel by 2013
Source Biodiesel Federal Program, Ministry of
Science and Technology-Brazil
17
Other potential growth markets
  • Plastics
  • Soy polyols market to reach 650m lbs by 2010
    depending on rapid investment in production
    capacityOmni Tech
  • Cargill and ADM have entered the market. Other
    soy polyol producers include Arkema, Urethane Soy
    System, Biobased Technologies, Pelron
  • Lubricants
  • Current biolubes market in the EU is around 100KT
    (200m lbs) and can reach 1.7m tonnes (36 share)
    by 2010NNFCC
  • Soy-based lubes in the US was estimated at 10m
    lbs in 2004Omni Tech
  • Like Europe, growing regulatory impacts on
    lubricants should result in more use of biolubes
    in the US in the next 5-10 years

18
Other potential growth markets
  • Solvents
  • Demand for green solvents in the US is expected
    to outpace conventional solvents and will capture
    20 of market value by 2010Freedonia Group
  • Methyl soyate, ethyl lactate (from corn) and
    d-limonene are some of the biobased solvents
    available in the market.
  • Use of methyl soyate as an industrial solvent was
    estimated at around 20m lbs in 2004 and is
    commercially available from more than 10
    producers in the USOmnitech
  • Current renewable solvents in the EU 60KT
    Potential by 2010 235KT (12.5 share)--NNFCC
  • Surfactants
  • RD for new oleo surfactants are ongoing
    especially coming from major oleochemical
    companies such as PG, Uniqema, Cognis, Croda and
    Akzo Nobel.
  • In the EU, renewable surfactants are around 460
    KT and has the potential to reach 920 KT (40
    share) by 2010--NNFCC

19
Other potential growth markets
  • Adhesives
  • Marcus Oil Chemical has a patent for vegetable
    oil-based wax for hot-melt adhesive applications.
  • Other raw materials used for bio-based adhesives
    include tall oil rosin, corn starch and soy
    flour.
  • Cosmetics/Personal Care
  • Growing consumer preference for natural
    ingredients/products
  • Specialty oils, butters, and natural waxes are
    increasingly becoming popular as cosmetic
    ingredients.
  • Fats and oils demand in US CT is projected to
    increase 33by volume from 1.1bn lbs. in 2003 to
    1.5bn lbs. in 2013 (42 by value from 225m to
    320m)Freedonia

20
Other potential growth markets
  • Paints/Coatings
  • In the US, linseed oil is the more popular
    vegetable oil used in paints, coatings and inks.
    Linseed oil use for oil-based coatings in 2004
    was 81.2m lbs.Omni Tech
  • Soybean oil use in alkyd resins production were
    130m lbs in 2004. Alkyd resin is a primary
    ingredient of oil-based or solvent-borne paints.
    Soy oil competes in this market mostly with
    linseed oil and tall oilOmni Tech
  • Inks
  • Between 1KT and 2KT of rape oil are used in the
    UK in printing inks
  • Potential maximum use of vegetable oils in
    European printing inks is estimated at 84KT
    (equiv. 210 KT of rapeseed)NNFCC
  • 2004 US linseed oil consumption in inks was
    around 60.9m lbs.Omni Tech

21
Biotechnology-a big key for more potential uses
of fats and oils
  • CASTOR BIOTECH TIDBITS
  • Vancouver-based Linnaeus Plant Sciences Inc. is
    working on castor genes to produce oilseed-based
    engine oils. The company is currently in
    multi-year partnership with Arkema.
  • Biochemists from Washington State University are
    working on an approach in identifying castor
    genes that will boost hydroxy fatty acid in an
    oilseed plant. (--Plant Journal 3/06)
  • The US Department of
  • Agriculture (USDA) is working
  • on developing transgenic castor
  • plants with reduced levels of
  • ricin toxin. Dow Chemical is
  • funding some of the
  • research.

Agbiotech Companies
Government Research
Chemical firms
Universities
Independent Research firms
Agriculture companies
Industry organizations
22
Traditional petro players look at agriculture for
future feedstock
Chevron
Sasol
Huntsman forms Green Chemistry business unit. We
are especially anxious to build our position in
this burgeoning field through the use of
bio-based feedstocks such as glycerine, natural
alcohols, methylesters, carbohydrates and
sugars. Hunstman 2006
Shell
DuPont forms BioFuels business unit which will
leverage the companys capabilities in agbiotech,
metabolic engineering, chemistry and process
engineering.
BASF is investing more than 320 million over the
next 3 years to develop the next generation plant
biotechnology products
Dow entered an Oilseed Engineering Alliance to
develop raw materials to produce chemicals and
industrial products from ag
crops.
Degussa is investing Euro 50 million in the next
5 years to develop products from renewable
materials
23
Green Chemistry is in!
  • Regulations tighten for traditional chemicals
  • Governments promoting green-based materials
  • Environmental awareness continue to increase
  • Consumer preference for natural-based products
  • Chemical industry are and will continue to look
    for alternative feedstock

24
References and acknowledgements
  • US Dept. of Agriculture
  • ICIS Pricing
  • US Census Bureau
  • National Biodiesel Board
  • European Biodiesel Board
  • Oil World
  • Citigroup Research
  • Freedonia Group
  • Brazilian Oilseed Processors Association (ABIOVE)
  • Brazil Ministry of Science and Technology
  • National Non-Food Crops Centre
  • Omni Tech International

25
Thank you for listening!
Doris de Guzman Associate Editor ICIS Chemical
Market Reporter 360 Park Avenue South, 12th
Floor New York, NY 10010 T 212-791-4228 E
Doris.de.Guzman_at_icis.com
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