Just like my recent interview with Japanese firm Mitsubishi Chemical (see ICB article for subscribers), I am hoping to get to know more about Thailand-based PTT Chemical (PTTCH) someday soon given their strategies within the renewable chemicals and bioplastic market.
The other day, Reuters put out a news article about PTTCH looking to buy a US-based polylactic acid (PLA) firm, possibly NatureWorks (who else in the US could it be??).
We will analyze more about this news in another post but first, yesterday,
PTTCH’s (Update 9/28: This should be PTT Group, which is a separate company from PTTCH. Darn it, I keep forgetting…) PTT Group’s joint venture with Mitsubishi Chemical PTTMCC Biochem Company announced that it has chosen BioAmber to exclusively supply PTTMCC with biosuccinic acid for its new 20,000 tonne/year polybutylene succinate (PBS) plant that will be built in Map Ta Phut (Rayong) starting next year.
The biodegradable plastic PBS is made from succinic acid and 1,4 butanediol (BDO). Mitsubishi Chemical currently produces PBS made from petroleum-based succinic acid and BDO in its 3,000 tonne/year pilot plant in Japan. Major applications for PBS are mulch films, packaging films and flushable hygiene products.
By the way, on my MCC interview article, I mentioned that the UK’s National Centre for Biorenewable Energy, Fuels and Materials (or NNFCC) estimates current global biosuccinic acid production at 16,000-30,000 tonnes/year. That number actually refers to the total succinic acid market (not just biosuccinic). My apologies to the NNFCC. The group roughly estimates 10% of that number quoted is based from biosuccinic acid.
An industry source meanwhile estimated global PBS and derivatives market is at 100,000-120,000 tonne/year.
The PBS plant in Thailand is expected to come online in 2014. PTTMCC said BioAmber’s platform offered the lowest cost biosuccinic acid and the lowest technology risk. BioAmber plans to build a 65,000 tonne/year succinic acid plant on the Map Ta Phut site and also plans to produce 50,000 tonne/year of bio-BDO on site. The companies did not indicate whether BioAmber will also supply bio-BDO to the PBS plant (I am currently looking for answers to this question).
The blog recalled that Mitsubishi Chemical also has a collaboration deal with bio-BDO producer Genomatica although MCC did not indicate on my interview with them whether Genomatica will be an exclusive BDO supplier to the PBS plant in Thailand.
On the press release, PTTMCC said it will help BioAmber secure feedstock for the plant, which will initially be sugar from cane/tapioca and subsequently biomass sugars. I asked MCC about the logistics and economics of their feedstock in Thailand and MCC said, PTT Group has good partnerships with the Thai government and the agriculture industry in Thailand so they will not have any problems in this area.
Speaking of economics, I just wrote an article about bio-BDO commercialization on ICIS Chemical Business that was published this Monday (link is for subscribers only). I asked BioAmber the economics of their succinic-based BDO.
If readers recall, I also wrote an article (this is free to access!) on March about the bio-BDO development and in one of my interviews, Genomatica noted that direct bio-BDO production is expected to be more cost-effective given that it only involves fermentation and separation processes, and therefore eliminates the need to purify succinic acid for BDO conversion.
According to BioAmber president Jean-Francois Huc, direct bio-BDO production could be more cost-effective compared to succcinic-BDO route if the biosuccinic used is purchased at market prices.
“In our case, we produce purified succinic acid in an aqueous solution — no evaporation or crystallization — and directly convert it into BDO and THF (tetrahydrofuran). Our cost for succinic acid is far below the market price. Because we have licensed a liquid phase hydrogenation catalyst from DuPont, we have integrated production of BDO and THF from sugar. As a result, we will produce BDO and THF for less than any fossil fuel route at current feedstock prices.” – Huc
Huc also noted that unlike in the case of the Davy vapor phase hydrogenation route to make BDO from succinic acid (source from another producer Myriant), their process does not need to produce an ester. Myriant currently has an agreement with Davy Process Technology to supply biosuccinic acid to Davy’s licensees. Come to think of it, PTT Chemical also has a R&D collaboration with Myriant (yes, it’s PTTCH not PTT Group that has collaboration deal with Myriant). The world is not that big enough for these renewable chemical companies eh?
Another point BioAmber noted is its Cargill yeast technology, which Huc said has a higher yield on sugar than the theoretical yield of the Genomatica route translating to less sugar consumed per kg of BDO/THF produced.
“Making renewable BDO is one thing but making polymer grade BDO is another. We have proven the purity and cost of our succinic acid via fermentation in a plant that operates at 30x the scale of Genomatica. We have been operating our plant for over 18 months and it has taken us this long to make the necessary changes to our process and hit our quality and cost targets. Genomatica has a lot more development work to prove out their process economics and purity at a scale that can ensure commercial success.” – Huc
Hmmm, I wonder what Genomatica will say to that statement? Not that I would want the blog to be a boxing range of sorts but all I can say is the world is still big enough to accommodate all bio-BDO that can be produced, I think.
As a background on the overall BDO market, the petroleum-based BDO volume sold in the merchant market is actually 1/3 of the total produced as most is captively consumed. According to consulting firm Nexant, global demand for BDO is at 1.4m tonnes in 2010.
According to Genomatica’s IPO S-1 filing, BDO supply is concentrated with the top 4 global suppliers BASF, Dairen Chemical, LyondellBasell and ISP accounting for 58% of global capacity in 2010. Annual BDO capacity from these four companies total 2.24bn pounds (about 1m tonnes/year) as of July 2010. Invista is the fifth largest producer with 240m lbs/year capacity in North America.