Corrected: Canadian renewable chems firm EcoSynthetix eyes Asia production

15 November 2011 18:41  [Source: ICIS news]

Correction: In the ICIS story headlined "Canadian renewable chems firm EcoSynthetics eyes Asia production" dated 15 November 2011, please read the headline as "Canadian renewable chems firm EcoSynthetix..." instead of  "...EcoSynthetics..." Also please read throughout text ...EcoSynthetix... instead of ...EcoSynthetics.... A corrected story follows.

TORONTO (ICIS)--EcoSynthetix is looking to set up production in Asia for its cornstarch-based binders, said the CEO of the Canadian renewable chemicals firm on Tuesday.

EcoSynthetix’s binders are used in the coatings and paper industries, where they replace hydrocarbon-based styrene butadiene (SB) latex binders.

“We do want to look carefully at Asia [for production] and are evaluating options as to where the best location is,” CEO John van Leeuwen said in a conference call.

EcoSynthetix expects to determine the location and capacity of production in Asia “in the next couple of quarters”, van Leeuwen said.

For the time being, the company will continue meeting demand from Asia from its production in North America and Europe, he said.

EcoSynthetix is building up capacities for its binders in anticipation of growing demand as it seeks to persuade paper mills to convert their production processes to corn-based binders.

“It would be a disaster if we have customers who want to start buying, and we can’t deliver,” Leeuwen said.

Earlier this month, EcoSynthetix commissioned an 80m lb/year contract manufacturing production line in the Netherlands.

The company expects to commission another 80m lb/year line in Tennessee in the US before the end of this year, bringing its overall production capacity to 235m lb/year, van Leeuwen said.

Van Leeuwen said that EcoSynthetix’s binders can help a typical medium-sized paper mill save some $1m/year (€730m/year) at a time when many mills are losing money and are under competitive pressure to cut costs amid overcapacity and high oil prices.

“The high and volatile pricing of petroleum-based binder products is driving robust interest in our breakthrough product," he said. EcoSynthetix’s binders help paper mills “decouple” their costs from the price of oil, he added.

However, van Leeuwen said SB latex prices have recently moderated as market participants addressed butadiene shortages. At the same time, EcoSynthetix saw the cost of its main raw material, cornstarch, increase in past months.

Nevertheless, EcoSynthetix's binders still sell at “a significant discount” to competing SB latex binders, he said.

($1 = €0.73)

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