News Focus: DSM mulls major renewables push

18 October 2010 00:00  [Source: ICB]

Netherlands-based firm sees major potential in biotechnology as a route to sustainable chemistry

Dutch advanced materials group DSM will decide within three to six months if it will invest in a commercial-scale biosuccinic acid plant, a top executive said last week.

Volkert Claassen, vice president of white biotechnology, told ICIS that if approved, the plant would most likely be located in the US, Brazil or China - places with advanced agricultural capabilities and good existing bio-­refinery infrastructure.

"The capacity of the new plant could be anywhere from 5-15,000 tonnes/year depending not just on the market but on what existing infrastructure is available. If we get approval, then start-up could be within a year. Time to market is everything," he said.

If this venture is successful, the next step would be to scale up to around 50,000 tonnes/year, he added, speaking on the sidelines of a press trip to the demonstration biosuccinic acid plant at Lestrem, near Lille, France.

DSM developed the plant in a joint agreement with French food ingredient group Roquette, which provides starch as a feedstock for the plant, and which is located at one of its existing production units.

The biosuccinic acid plant has capacity of a few hundred tonnes/year and is already supplying small quantities to potential customers for testing.

DSM says biosuccinic acid could be used in a large variety of existing petrochemical-based applications. It is working on derivatives that could be used to manufacture polyurethanes (PUs), plasticizers, coatings and resins, biopolymers and solvents.

DSM andRoquette are waiting for regulatory approval for a formal 50:50 joint venture, known as Reverdia, which will develop the biosuccinic acid business.

DSM sees biotechnology as a key driver of its growth. In September it revealed a renewed focus on biotechnology by announcing the further development of "emerging business areas" in white (industrial) and red (medical) biotech.

Together with DSM Advanced Surfaces - the company is targeting combined turnover of €1bn ($1.4bn) by 2020. Sales from biotech currently amount to less than 1% of that, according to Claassen.

He said: "White biotech sales have been quite resilient in the economic crisis. It's an area where we have clear expertise, so we're very well positioned to do it. There are lots of white biotech trends that favor white biotech products, so we believe that demand will be quite strong."

DSM favors a strategy of licensing its biotech technology once it has been proven, improving its return on capital employed.

The level of investment required to develop bio-refineries and associated chemical production will require long-term, consistent state support, according to Claassen. He expressed frustration at the approach taken in Europe compared with the US, saying that although the Roquette project had been very well supported by France, Europe had yet to see the level of support seen in the US.

"In Europe we have the expertise, the chemistry and the materials knowledge, but what is required is determination and consistency. We need to know what they can do in terms of financial support and investment incentives. In the end, we need to compete against the oil-based industry, which has taken many years to develop to the level of efficiency it has today."

He added: "To allow this to happen for plant-based industry it needs to be given time to mature and be successful. Bio-based technology can't compete from day one, so we need support."

The US has benefited from strong support that originated under George W. Bush's administration. Bush wanted to stimulate biofuels to cut the country's dependence on foreign oil. European state aid has been patchy, with competition between member states preventing a successful EU-wide approach.

Claassen believes first-generation bio-feedstocks (from food crops) need to be proven and developed before a move to the second generation could be viable. A lack of financial incentives is holding up the second generation: "In the future, we may use plant residues, but it is too high-risk to go straight there. There are second-generation pilot plants and I don't think technology is holding this back. Now it's about whether the industry can get the investments in place."

Visit Doris de Guzman's Green Chemistry blog

By: Will Beacham
+44 20 8652 3214

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