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Industrial Use of Canola Oil Opportunities and Challenges

Industrial Use of Canola Oil Opportunities and Challenges. Bill McNeill The Dow Chemical Company March, 2007. About Dow …. A science and technology leader with annual sales of $49 billion Founded in 1897 by Herbert H. Dow in Midland, Michigan

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Industrial Use of Canola Oil Opportunities and Challenges

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  1. Industrial Use of Canola OilOpportunities and Challenges Bill McNeill The Dow Chemical Company March, 2007

  2. About Dow … • A science and technology leader with annual sales of $49 billion • Founded in 1897 by Herbert H. Dow in Midland, Michigan • Supplies more than 3,300 products to customers in 175 countries • From 156 manufacturing sites in 37 countries • Employs 43,000 people globally

  3. The Dow Chemical Company

  4. Serving Many Markets with Essential Solutions Electronics/ Entertainment 3% Food/Food Packaging 22% Building Maint/ Construction 11% Home Care/ Improvement 10% Miscellaneous 1% Hydrocarbons & Energy 12% Automotive/ Transportation 9% Water Purification 2% Paper/ Publishing 7% Health 3% Furniture/Furnishings 4% Personal/ Household Care 16%

  5. Strategic Themes Drive Financial Discipline and Low Cost to Serve Set the Standard for Sustainability Invest for Strategic Growth Build a People Centric Performance Culture

  6. Changing The Game Trends Driving Renewable Feedstocks • High Cost and Volatile Hydrocarbon Feedstocks • Energy and Raw Material Security • Climate Change – Increasing Cost of Carbon Emissions • Sustainability – LOHAS Consumer Segment

  7. Dow Technology Polyol + Isocyanate Soy Polyols Soy Oil FAME + Glycerine (by product) Polyurethanes

  8. Better Moisture Resistance Better Performance Soy Polyol Alternate Polyol Enhanced Whiteness Control Foam Soy Foam Exposed Exposed Covered Covered

  9. Epichlorohydrin + BPA Epoxy Products Glycerine to Epichlorohydrin Seed Oil FAME + Glycerine (by product)

  10. Renewable Project Risks to Manage Raw Material Supply Conversion Technology Market Acceptance

  11. Renewable Feedstock Options Sugar & Starch Fats & Oils Biomass • Refined global commodity • 150 MMT • 12-25 ¢/lb • Refined global commodity • 150 MMT • 15-40 ¢/lb • Crude Product • Developing supply chain • 100 Giga T

  12. Conversion Technologies Renewable Feedstocks Gasification Chemical Processes Fermentation Syngas Polyols Epichlorohydrin Propylene Glycol Surfactants Lubricants Ethanol Chemicals Alcohols Polymers Ethylene

  13. Exact Replacements Equivalent in Application New Products Now with Renewable Plastic • Cost saving is driver • Defend against new competitors • Expanded Offering • Customer Validation • Significant Improvement in cost/performance required • Customer Driven Market Acceptance Increasing Risk and Difficulty

  14. Critical Issues • Business Strategy • Feedstock Availability/Cost • Various Feedstock Cost Scenarios • Drop in Replacement vs. New Product • Process Development Required • Platform vs. Single Molecule • Freedom to Practice Technology • Sustainable Differentiation

  15. Chemicals from Renewable Feedstocks • Advantages • Potential Low Cost • Feedstock Diversification • Potential for Better Performance • Reduced Environmental Impact • Expanded Business Models • Growing Consumer Demand • Challenges • Complex Supply Chain • Distributed Business Model • Established Petrochemical Products • New Conversion Technologies • Coal • Cost, Cost, Cost

  16. Changing the Game … It Will Take Time - • 150 MM Lbs PLA expansion vs. 19 Billion Lbs PE new capacity • 20 MM Lbs Soy Polyols vs. 12 Billion lbs of PO produced per year • 150,000 MT Glycerin-Based EPI Vs. 1,400,000 MT capacity 8th annual Bioplastics Conference, 6-7 Dec 2006, Frankfurt by 2010 --- 0.9-1.6% of petroleum based plastics will be replaced with bioplastics, by 2020 --- the percentage could be 1.25-2.5%. 2005 – 2008 --- global capacity for bioplastic increases from 360,000 to 600,000 t/yr

  17. Changing the Game … • Now • First generation biofuels • PDO • PLA polymers • 1 – 5 years • By-product glycerin to chemicals • Seed oil-based Polyols • Ethanol to olefins • PHA, PHB polymers • Butanol, Succinic Acid from sugar • 5 -10+ Years • Second Generation Biofuels • Bio-refineries, industrial chemicals • Bio Engineered crops for chemicals

  18. ® Thank you! Questions.

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