THE DECISION by Dutch chemical firm Royal DSM to invest in biotechnology and build a $1.5bn business over the past decade is starting to pay dividends, particularly with uncertainty over the future of fossil fuels.
Less than 5% of the chemicals produced globally are currently made using biotechnology but there is even greater potential, says Volkert Claassen, vice president of white biotechnology DSM. It is perfectly feasible that 20-25% could be bio-based - and even this may be a conservative estimate, he says.
"We are a leader in this field and for us right now it is a very important business," says Claassen. "We see a number of chemical products in our portfolio that could probably be made more cost-effectively through biotechnology.
"I think that's something that many chemical companies are facing right now, so we see it as a competitive advantage to have these capabilities, and to be able to switch from chemical to biotech processes."
In 2005, the firm identified four emerging business areas: personalized nutrition, specialty packaging, biomedical materials and white (industrial) biotechnology - each tipped as a significant growth driver through to 2015. To ensure their development, DSM has pledged to raise its annual investment in innovation from euro 30m ($46m) in 2005, to euro 70m by 2010.
The development of white biotech merges the competencies of DSM's life sciences and material sciences divisions, says Claassen.
DSM is concentrating on second- generation biofuels made from nonfood feedstocks, helping to allay some of the fears voiced about biodiversity and land use. Although these concerns may be relevant further down the line as the market grows, he points out that technologies are likely to see a big improvement in efficiency, so any detrimental effects should be minimal.
"This is really a tremendous opportunity but it will take time the development on a commercial scale of cellulosic conversion may well take another five years to be fully implemented and be cost effective.
"In the longer term, I think there will be huge benefits. When you look at a country like Brazil, where all the residuals are collected, not only harvesting the sugarcane but also the bagasse, you can see the huge potential."
Earlier this year, DSM and French starch and starch derivatives firm Roquette joined forces to produce biorenewable succinic acid - normally a crude oil and natural gas derivative. This can be used in pharmaceuticals, food and automotive applications and as an intermediate for high-performance polymers.
Polybutylene succinic plastics, in particular, could be a major outlet, says Claassen.
"The succinic market is relatively small right now, but if PBS is successful it could be really huge, competing with polypropylene [PP] and polyethylene [PE]," he says. "But this is going to take a long time. It's a long-term project with new materials you're speaking in terms of decades, rather than years.
TAKING THE LONG VIEW
"We recognized this in 2004-2005, made the investment and will probably start to see some revenues from 2010. Initially, this will be very small but in the end, I'm sure this is going to be a very important change to the way we make materials. I don't think the existing ways are sustainable - there needsto be an alternative."
Fermentation processes that use renewable resources are sustainable and significantly reduce carbon dioxide (CO2) emissions. Furthermore, energy savings of 30-40% are achievable, compared with conventional methods.
This is the first bio-based production process of its kind, says Claassen. "We're using sugar and CO2 to make the succinic acid. We're doing what nature does with its microorganisms but on a larger scale, using organisms that are more applicable to an industrial environment. You need robustness, reliability and high productivity."
As part of the agreement, Roquette's existing facilities at Lestrem, in northern France, will be adapted and used as a demonstration plant. It is expected to come on stream toward the end of 2009.
"There won't be a tremendous investment in the site we're trying to set this up in the most cost-effective way by making some additions to the existing plant," he says.
The plant's annual capacity will initially be limited to only a few hundred tonnes, although after a trial period, DSM plans to start large-scale production within two years.
The collaboration between the two firms is a result of the French Industrial Innovation Agency's BioHub program, which helps develop new business opportunities by linking scientific institutes, universities and biotech companies.
Besides, the obvious benefits of reducing the company's reliance on fossil fuels, an increase in environmental awareness among consumers is also helping to drive this budding technology. "There is a clear market pull for this," says Claassen. "It doesn't mean that consumers are going to pay more for it - I don't think that is going to happen at all - but I think that when presented with an opportunity to buy green versus a traditional product at the same price, they will go green."
The message from Claassen is clear companies must act now if they are to resist the full effects of firming energy prices and raw material costs. It will take time to research and nurture these embryonic technologies, but the potential is enormous.
He does not rule out further investment or partnerships, but DSM clearly seems confident that it has found a viable alternative.
As part of its strategy to develop alternative feedstocks, DSM Venturing also formed a partnership with US-based high-performance polymers and fine chemicals producer Novomer last December, to develop technology that uses CO2 and renewable materials to produce performance polymers, plastics and other chemicals. These will be used in applications including electronics, paper coatings and medical implants.
The catalyst technology allows polymeric materials to be produced from renewable feedstocks, and help to reduce the reliance on fossil fuels. The use of raw materials such as CO2 and carbon monoxide will allow the cost-effective manufacture of bio-based building blocks, polymers, compounds and formulations
A GREENER DIRECTION
So what is white biotechnology?
Belgium-based biotech industry association Europabio describes white as the use of living cells such as yeast, bacteria and enzymes to change industrial processes and products. It can reduce pollution, waste, and the use of energy, feedstocks and water.
One example is the use of enzymes in washing powder to help remove stains from clothes at lower temperatures. This can cut energy use and water consumption, minimizing its environmental impact.
White biotech can also refer to materials made from renewable raw materials, or biomass. These include starch, cellulose, vegetable oils and agricultural waste used to produce chemicals, bio-degradable plastics, pesticides and biofuels.
Ethanol, a renewable fuel made from biomass, has already seen a huge upturn in demand in the US as a replacement for gasoline additive methyl tertiary butyl ether (MTBE). Its use instead of fossil fuels could mean a significant reduction in greenhouse gas emissions.
Other types of biotechnology are: red, used in medicines and vaccines green, for agriculture and blue for marine applications.
Less than 5% of the chemicals produced globally are currently made using biotechnology but there is even greater potential, says Volkert Claassen, vice president of white biotechnology DSM. It is perfectly feasible that 20-25% could be bio-based - and even this may be a conservative estimate, he says.
"We are a leader in this field and for us right now it is a very important business," says Claassen. "We see a number of chemical products in our portfolio that could probably be made more cost-effectively through biotechnology.
"I think that's something that many chemical companies are facing right now, so we see it as a competitive advantage to have these capabilities, and to be able to switch from chemical to biotech processes."
In 2005, the firm identified four emerging business areas: personalized nutrition, specialty packaging, biomedical materials and white (industrial) biotechnology - each tipped as a significant growth driver through to 2015. To ensure their development, DSM has pledged to raise its annual investment in innovation from euro 30m ($46m) in 2005, to euro 70m by 2010.
The development of white biotech merges the competencies of DSM's life sciences and material sciences divisions, says Claassen.
DSM is concentrating on second- generation biofuels made from nonfood feedstocks, helping to allay some of the fears voiced about biodiversity and land use. Although these concerns may be relevant further down the line as the market grows, he points out that technologies are likely to see a big improvement in efficiency, so any detrimental effects should be minimal.
"This is really a tremendous opportunity but it will take time the development on a commercial scale of cellulosic conversion may well take another five years to be fully implemented and be cost effective.
"In the longer term, I think there will be huge benefits. When you look at a country like Brazil, where all the residuals are collected, not only harvesting the sugarcane but also the bagasse, you can see the huge potential."
Earlier this year, DSM and French starch and starch derivatives firm Roquette joined forces to produce biorenewable succinic acid - normally a crude oil and natural gas derivative. This can be used in pharmaceuticals, food and automotive applications and as an intermediate for high-performance polymers.
Polybutylene succinic plastics, in particular, could be a major outlet, says Claassen.
"The succinic market is relatively small right now, but if PBS is successful it could be really huge, competing with polypropylene [PP] and polyethylene [PE]," he says. "But this is going to take a long time. It's a long-term project with new materials you're speaking in terms of decades, rather than years.
TAKING THE LONG VIEW
"We recognized this in 2004-2005, made the investment and will probably start to see some revenues from 2010. Initially, this will be very small but in the end, I'm sure this is going to be a very important change to the way we make materials. I don't think the existing ways are sustainable - there needsto be an alternative."
Fermentation processes that use renewable resources are sustainable and significantly reduce carbon dioxide (CO2) emissions. Furthermore, energy savings of 30-40% are achievable, compared with conventional methods.
This is the first bio-based production process of its kind, says Claassen. "We're using sugar and CO2 to make the succinic acid. We're doing what nature does with its microorganisms but on a larger scale, using organisms that are more applicable to an industrial environment. You need robustness, reliability and high productivity."
As part of the agreement, Roquette's existing facilities at Lestrem, in northern France, will be adapted and used as a demonstration plant. It is expected to come on stream toward the end of 2009.
"There won't be a tremendous investment in the site we're trying to set this up in the most cost-effective way by making some additions to the existing plant," he says.
The plant's annual capacity will initially be limited to only a few hundred tonnes, although after a trial period, DSM plans to start large-scale production within two years.
The collaboration between the two firms is a result of the French Industrial Innovation Agency's BioHub program, which helps develop new business opportunities by linking scientific institutes, universities and biotech companies.
Besides, the obvious benefits of reducing the company's reliance on fossil fuels, an increase in environmental awareness among consumers is also helping to drive this budding technology. "There is a clear market pull for this," says Claassen. "It doesn't mean that consumers are going to pay more for it - I don't think that is going to happen at all - but I think that when presented with an opportunity to buy green versus a traditional product at the same price, they will go green."
The message from Claassen is clear companies must act now if they are to resist the full effects of firming energy prices and raw material costs. It will take time to research and nurture these embryonic technologies, but the potential is enormous.
He does not rule out further investment or partnerships, but DSM clearly seems confident that it has found a viable alternative.
As part of its strategy to develop alternative feedstocks, DSM Venturing also formed a partnership with US-based high-performance polymers and fine chemicals producer Novomer last December, to develop technology that uses CO2 and renewable materials to produce performance polymers, plastics and other chemicals. These will be used in applications including electronics, paper coatings and medical implants.
The catalyst technology allows polymeric materials to be produced from renewable feedstocks, and help to reduce the reliance on fossil fuels. The use of raw materials such as CO2 and carbon monoxide will allow the cost-effective manufacture of bio-based building blocks, polymers, compounds and formulations
A GREENER DIRECTION
So what is white biotechnology?
Belgium-based biotech industry association Europabio describes white as the use of living cells such as yeast, bacteria and enzymes to change industrial processes and products. It can reduce pollution, waste, and the use of energy, feedstocks and water.
One example is the use of enzymes in washing powder to help remove stains from clothes at lower temperatures. This can cut energy use and water consumption, minimizing its environmental impact.
White biotech can also refer to materials made from renewable raw materials, or biomass. These include starch, cellulose, vegetable oils and agricultural waste used to produce chemicals, bio-degradable plastics, pesticides and biofuels.
Ethanol, a renewable fuel made from biomass, has already seen a huge upturn in demand in the US as a replacement for gasoline additive methyl tertiary butyl ether (MTBE). Its use instead of fossil fuels could mean a significant reduction in greenhouse gas emissions.
Other types of biotechnology are: red, used in medicines and vaccines green, for agriculture and blue for marine applications.
