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Bio succinic acid: It's a marathon, not a sprint

At last week's Bio-based Materials Conference in Cologne, the second day was dominated by three talks on the developments around bio succinic acid. Of the four major players in this area, three - Reverdia, Succinity and Myriant - discussed the state of the art and presented their views on the market potential for this rising bio-based building block.

All three estimated the addressable market at around $7 billion. And all three were generally optimistic about the outlook, betting on, among other things, the increasing demand in the replacement of maleic anhydride and adipic acid for the manufacture of, for example, BDO, a large-volume chemical used in the manufacture of thermoplastics, polyesters and plasticizers. But all three also talked of wrestling with the strategies needed to grow. Growth requires investment, and proven value is needed in order to attract that investment. It a process that takes time, as Markus Hummelsberger of Succinity pointed out: "It's a marathon, not a sprint."

So what is bio succinic acid? It's a platform chemical that can be used to make PBS, coatings, polyurethanes and plasticizers, to name but a few. As Richard Janssen, from Reverdia, the joint venture between DSM:(Netherlands) and Roquette (France), pointed out, historically petro-based succinic acid has been a small volume, high price chemical. He thinks that will change, with the advent of a bio-based alternative. "We have an alternative process that can compete with other chemicals out there," he said. "It's a low pH yeast process that is robust, simple, reproducible and sustainable that offers feedback flexibility and better economics."

He called it "enabling," in the sense that it enables the use of more sustainable materials. "Its use has the greatest impact at the brand owner - the end of the chain - because of the dramatically lower carbon footprint," he said. "So we collaborate throughout the value chain to create market pull." He cited numerous advantages of using bio succinic acid, including the opportunity to advance the eco-friendliness of a brand's image and to meet consumer demand for green products. "It offers an alternative supply for raw materials; different performances can lead to new materials. We have four major suppliers at the moment - and we're going to need them," he concluded.

Markus Hummelsberger, from Succinity GmbH, a joint venture between BASF and Dutch-based Corbion, talked about the drivers for bio renewables, i.e. climate change and limited fossil resources, which led to the decision to enter the field. The two parent companies are now leveraging their complementary strengths and technical capabilities to enable the production and commercialization of Succinity Biobased Succinic acid. The venture's first plant, with a capacity of 10.000 metric tons per year started up on track in the first quarter of 2014. The next milestone will be a bigger planet, said Hummelsberger. "We analyzed and compared the quality of the PBS we produce, which was fine, with a clear against petro-based PBS, and the polymeric behavior was equivalent. So, we'll wait to see how the situation shapes up before we decide on the next step." 

There's also the matter of figuring out how to create value, assessing where value is created and how it is shared in the chain. After all, if it is the brand owners that are generating value, where does that leave the monomer producers? How to deal with that? "Value is often generated and captured at different steps," he said. "We need to work together."

US-based Myriant, which today is majority-owned by Thailand's PTT Global Chemical, currently has two operating facilities, one at Leuna (Germany) and the other, a commercial plant at Lake Providence, in the state of Louisiana in the US, with a 30 million LB/annum capacity and "significantly committed demand". Although the feedstock is currently sugar, alternatives, i.e. non-food crops, are being sought.

Crucially: "We assume no premium," said Arne Duss, of Myriant. "Our bio succinic acid can only compete if it is cost-advantaged."  To achieve the necessary scale, the company is planning to build a new plant - "not a greenfield site," said Duss - in order to reach a  capacity of 140 million LB/annum. Site selection is in an advanced stage.

He also emphasized the importance of partnerships. "These are absolutely vital for a company of our size," he said. "We have entered into partnerships that extend our global reach and accelerate growth. We're also interested in capital-light growth, by which we mean partnering or licensing opportunities for selected geographical products."

Duss also said that Myriant had a robust pipeline offering cost advantages for multiple biochemicals. "The work on lactic acid and acrylic acid is in the final R&D stage," he said. "We're also developing a biosynthesis route for muconic acid, the precursor of adipic acid, used for the production of nylon-6,6 and polyurethane. So, we will offer multiple derivatives for licensing."

Support for believing in bio succinic acid was also provided in February of this year, when Allied Market Research published a market research report titled "Bio-succinic Acid Market - Size, Share, Trends, Opportunities, Global Demand, Insights, Analysis, Research, Report, Company Profiles, Segmentation and Forecast, 2013 - 2020" predicting global bio-succinic acid market volume growth at a CAGR of 45.6% between 2013 and 2020. The report saw the much reduced carbon footprint, compared with petroleum-based succinic acid, plus "adoption in newer industrial application areas, namely, 1,4-butanediol (BDO), PBS, polyester polyols, alkyd resins and plasticizers", as providing "faster growth thrust to the market". PBS is expected to be the fastest growing application, at an estimated CAGR of 38.9% from 2014 to 2020, on account of increasing bioplastics demand, particularly in Europe and North America.

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