OLEOCHEMICALS

www.icis.com20 | ICIS Chemical Business | December 6-12, 2010

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XXXXXXXXXXX IN BRIEF

TWO DECK HEADING TWO DECK HEADING50 words for a NIB. 275 words

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OLEOCHEMICALS IN BRIEF

EU PROBES SUPPORT FATTY ALCOHOL HIKESImpending antidumping investi-

gations by the European

Commission against fatty alco-

hol producers in India, Indonesia

and Malaysia have resulted in

higher European spot prices,

reported several Asian produc-

ers. Following complaints of

dumping filed in June 2010 by

Cognis and Sasol Olefins &

Surfactants, Asian producers

have taken a cautious approach

when marketing material in the

EU. One buyer said there were

also other factors supporting

current higher fatty alcohol price

levels such as higher feedstock

costs and tight supply.

US FATTY ALCOHOL PRICE UP ON TIGHT SUPPLYTight supplies were pushing up

US fatty alcohol prices as first-

quarter (Q1) contract negotia-

tions began. Tight supply was

underpinned by an ongoing plant

outage in Malaysia, where an

October explosion was expected

to keep production shut down for

up to six months. Buyers said

two major importers verified they

would not bring material into the

US in Q1. Several US buyers

were already negotiating prices

for Q1 2011 contracts with offers

from suppliers at double-digit

increases from Q4 2010 levels.

US METALLIC STEARATES PRICE HIKES ON TAPRising fats and oils prices are

driving price hikes on US metallic

stearates. All effective December

15, Ferro’s metallic stearates will

increase by 10 cents/lb,

Baerlocher USA will hike its

tallow-derived metallic stearates

by 10 cents/lb ($220/tonne,

€168/tonne) and zinc stearate

prices by 13 cents/lb. Norac

Additives will increase its COAD

and MATHE zinc stearate prod-

ucts by 10 cents/lb and all other

COAD and MATHE metallic stear-

ate products by 8 cents/lb. PMC

Biogenix will increase its metallic

stearates by 10 cents/lb, effec-

tive January 1.

Malaysia finds glycerin useGlycosBio and METabolic EXplorer to build bio-based chemical facilities using glycerin

GLYCERIN DORIS DE GUZMAN NEW YORK

GlycosBio’s Cilento closes deal with Bio-Xcell CEO Raja Ridzwa Aziz

Malaysian state agency Malaysia Biotechnology Corp. (Biotech-Corp.) attracted two foreign in-vestors last month – US-based Glycos Biotechnologies (Glycos-Bio) and France-based METabol-ic EXplorer (METEX) – to devel-op and commercialize new uses for glycerin as part of the govern-ment’s goal to increase its global biotechnology presence, as well as create more opportunities for its palm industry.

METEX plans to build its first crude-glycerin-based 1,3 propan-ediol (PDO) production facility in Southeast Asia with a step-by-step 50,000 tonne/year plant lo-cated in Bio-Xcell, a developing biotechnology park and ecosystem established early this year by BiotechCorp. in the Iskandar region.

METEX will receive financial backing from the Malaysian gov-ernment of up to €30m ($39m) to

build a plant. Once the plant goes into service, the company will take over the remainder of the investment under a 10-year leasing arrangement.

METEX will contribute €6m in the real-estate purchase and will be tax-exempt for 10 years. Aside from the financing benefits, Ma-laysia also offers a strategic geo-graphical position for METEX to serve the growing demand for PDO in Asia, according to CEO Benjamin Gonzalez.

ACT LOCALLY“METEX’s strategy is to become the first PDO manufacturer in the Asian region to serve the local high demand: Malaysia is close to India, South Korea, Taiwan, Japan

and China,” said Gonzalez.“In Malaysia, the world’s sec-

ond-largest producer of palm oil, METEX will have secure, com-petitive upstream access to crude glycerin, a by-product of the bi-odiesel industry.”

Gonzalez estimates the global PDO market’s growth at 20%/year, and production is projected to reach 700,000 tonnes in 2020 with a market value of €1.3bn.

“The PDO market is very dy-namic, especially in Asia where there is a strong and growing de-mand for the chief application of PDO – the production of PTT [polytrimethylene terephthalate] driven by the textile industry,” he said.

METEX plans to initially pro-duce 8,000 tonnes of glycerin-based PDO, which the company expects to have on stream within 18–24 months.

The company did not disclose how much crude glycerin will be used for feedstock.

METEX is currently producing more than 1 tonne of PDO samples via fermentation processing at its pilot plant in Clermont-Ferrand, France, which the company start-ed in January.

“The samples are used for tests on the principal PDO appli-cations in order to meet strong and growing demand from man-ufacturers interested in the tech-nology,” said Gonzalez.

Bio-Xcell will also house a glyc-

erin-based isoprene manufactur-ing facility, as well as a research center to be built by GlycosBio.

PLANS TAKE SHAPEThe company confirmed in early November that it was pushing forward with its plans to build a 20,000–40,000 tonne/year fer-mentation-derived bio-isoprene plant in the Iskandar region, which is expected to be opera-tional in 2012. Investment is pegged at around $15m–20m.

GlycosBio CEO Richard Cilen-to noted the company’s plans to focus much of its initial research and development (R&D) efforts on creating isoprene to support Malaysia’s rubber industry.

Isoprene is a key feedstock in synthetic rubber manufacturing. GlycosBio’s technology can also produce ethanol, lactic acid, ace-tone, 1,2-propanediol (PDO), 1,4-butanediol (BDO) and suc-cinic acid from crude glycerin, said Cilento.

“For Malaysia, isoprene is a strategic product because of the large domestic latex industry and where we plan to focus much of our R&D efforts,” he said. “Our long-term strategy includes fur-ther expansion in Malaysia and across Southeast Asia, forming joint venture partnerships with petrochemical, oleochemical and biofuel producers.”

The company also intends to partner with end-market players

“METEX’s strategy isto become the first…to serve the localhigh demand”BENJAMIN GONZALEZCEO, METEX

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OLEOCHEMICALS

December 6-12, 2010 | ICIS Chemical Business | 21www.icis.com

Middle East chemicals move downstreamFEATURE P34

in the development of advanced biochemicals, Cilento added.

GlycosBio is currently operat-ing a 150,000 liter/year pilot fa-cility outside Houston, Texas, US, which started up in Novem-ber 2009.

The rapid implementation of the facility in Malaysia is Glycos-Bio’s quickest way to achieve commercialization, said Cilento.

VALUE-ADDED PRODUCTWith its technology, GlycosBio says oleochemical and biodiesel manufacturers can significantly increase the value of crude glyc-erin by converting it into value-added chemicals instead of sim-ply refining the product.

A 20,000 tonne/year plant in Malaysia using its technology can use an average of 30,000 tonnes/year of crude glycerin, depending on the chemicals to be produced, said Cilento.

“These manufacturers can in-crease the value of crude glycerin

by 10–15 times using our technol-ogy, compared to a value of two to three times by just converting them to refined glycerin,” Cilento noted.

Crude glycerin’s current price also gives it a competitive advan-tage over sugar, which is what many industrial biotechnology companies are currently using as feedstock. “In using crude glyc-erin, we also see reduction in

commodity risk compared to food-based feedstock like sugar,” Cilento added.

PRICE RISINGThe average sugar price world-wide has been climbing from the mid-15s cent/lb range seen in May to the high 20 cents/lb range seen in November.

ICIS assessed the average crude

glycerin price in Asia this year at 9–14 cents/lb CIF (cost, insurance and freight), China, while the av-erage price of US crude glycerin this year was pegged at 5–11 cents/lb FOB (freight on board), US Gulf.

Refined glycerin prices in Southeast Asia this year were as-sessed from the mid-20s cent/lb range seen in August, to as high as 37 cents/lb in late November.

Average US vegetable-based refined glycerin prices also slightly climbed in November to 32 cents/lb, compared with 27 cents/lb seen in July, as assessed by ICIS.

The recent increase in glycerin prices was driven by spikes in crude palm oil prices in Asia, while in the US, higher glycerin prices were blamed on tighter supply in the absence of biodie-sel production. Additional reporting by Serena

Seng in Singapore and Judith

Taylor in Houston

SOURCE: ICIS

ASIA PACIFIC GLYCERIN PRICE CLIMBSCents/lb

5

10

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35

40

NOSAJJMAMFJD2009 2010

Refined, spot

Crude, spot

SOURCE: ICIS

US GLYCERIN PRICE STRUGGLING UP Cents/lb

0

5

10

15

20

25

30

35

40

NOSAJJMAMFJD2009 2010

Refined

Crude

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