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Impending antidumping investi50 words for a NIB. 275 words gations column of NIBs for a fullby the European includCommission ing headline against fatty alcohol producers in India, Indonesia and Malaysia have resulted in higher European spot prices, reported several Asian producers. Following complaints of dumping filed in June 2010 by Cognis and Sasol Olefins & Surfactants, Asian producers have taken a cautious approach when marketing material in the EU. One buyer said there were also other factors supporting current higher fatty alcohol price levels such as higher feedstock costs and tight supply.


Malaysia finds glycerin use
GlycosBio and METabolic EXplorer to build bio-based chemical facilities using glycerin
Malaysian state agency Malaysia Biotechnology Corp. (BiotechCorp.) attracted two foreign investors last month – US-based Glycos Biotechnologies (GlycosBio) and France-based METabolic EXplorer (METEX) – to develop and commercialize new uses for glycerin as part of the government’s goal to increase its global biotechnology presence, as well as create more opportunities for its palm industry. METEX plans to build its first crude-glycerin-based 1,3 propanediol (PDO) production facility in Southeast Asia with a step-bystep 50,000 tonne/year plant located in Bio-Xcell, a developing biotechnology park and ecosystem established early this year by BiotechCorp. in the Iskandar region. METEX will receive financial backing from the Malaysian government of up to €30m ($39m) to

GlycosBio’s Cilento closes deal with Bio-Xcell CEO Raja Ridzwa Aziz and China,” said Gonzalez. “In Malaysia, the world’s second-largest producer of palm oil, METEX will have secure, competitive upstream access to crude glycerin, a by-product of the biodiesel industry.” Gonzalez estimates the global PDO market’s growth at 20%/ year, and production is projected to reach 700,000 tonnes in 2020 with a market value of €1.3bn. “The PDO market is very dynamic, especially in Asia where there is a strong and growing demand for the chief application of PDO – the production of PTT [polytrimethylene terephthalate] driven by the textile industry,” he said. METEX plans to initially produce 8,000 tonnes of glycerinbased PDO, which the company expects to have on stream within 18–24 months. The company did not disclose how much crude glycerin will be used for feedstock. METEX is currently producing more than 1 tonne of PDO samples via fermentation processing at its pilot plant in Clermont-Ferrand, France, which the company started in January. “The samples are used for tests on the principal PDO applications in order to meet strong and growing demand from manufacturers interested in the technology,” said Gonzalez. Bio-Xcell will also house a glycerin-based isoprene manufacturing facility, as well as a research center to be built by GlycosBio.

Tight supplies were pushing up US fatty alcohol prices as firstquarter (Q1) contract negotiations began. Tight supply was underpinned by an ongoing plant outage in Malaysia, where an October explosion was expected to keep production shut down for up to six months. Buyers said two major importers verified they would not bring material into the US in Q1. Several US buyers were already negotiating prices for Q1 2011 contracts with offers from suppliers at double-digit increases from Q4 2010 levels.

“METEX’s strategy is to become the first… to serve the local high demand”

Rising fats and oils prices are driving price hikes on US metallic stearates. All effective December 15, Ferro’s metallic stearates will increase by 10 cents/lb, Baerlocher USA will hike its tallow-derived metallic stearates by 10 cents/lb ($220/tonne, €168/tonne) and zinc stearate prices by 13 cents/lb. Norac Additives will increase its COAD and MATHE zinc stearate products by 10 cents/lb and all other COAD and MATHE metallic stearate products by 8 cents/lb. PMC Biogenix will increase its metallic stearates by 10 cents/lb, effective January 1.

build a plant. Once the plant goes into service, the company will take over the remainder of the investment under a 10-year leasing arrangement. METEX will contribute €6m in the real-estate purchase and will be tax-exempt for 10 years. Aside from the financing benefits, Malaysia also offers a strategic geographical position for METEX to serve the growing demand for PDO in Asia, according to CEO Benjamin Gonzalez.

ACT LOCALLY “METEX’s strategy is to become the first PDO manufacturer in the Asian region to serve the local high demand: Malaysia is close to India, South Korea, Taiwan, Japan

PLANS TAKE SHAPE The company confirmed in early November that it was pushing forward with its plans to build a 20,000–40,000 tonne/year fermentation-derived bio-isoprene plant in the Iskandar region, which is expected to be operational in 2012. Investment is pegged at around $15m–20m. GlycosBio CEO Richard Cilento noted the company’s plans to focus much of its initial research and development (R&D) efforts on creating isoprene to support Malaysia’s rubber industry. Isoprene is a key feedstock in synthetic rubber manufacturing. GlycosBio’s technology can also produce ethanol, lactic acid, acetone, 1,2-propanediol (PDO), 1,4-butanediol (BDO) and succinic acid from crude glycerin, said Cilento. “For Malaysia, isoprene is a strategic product because of the large domestic latex industry and where we plan to focus much of our R&D efforts,” he said. “Our long-term strategy includes further expansion in Malaysia and across Southeast Asia, forming joint venture partnerships with petrochemical, oleochemical and biofuel producers.” The company also intends to partner with end-market players

20 | ICIS Chemical Business | December 6-12, 2010

Middle East chemicals move downstream


in the development of advanced biochemicals, Cilento added. GlycosBio is currently operating a 150,000 liter/year pilot facility outside Houston, Texas, US, which started up in November 2009. The rapid implementation of the facility in Malaysia is GlycosBio’s quickest way to achieve commercialization, said Cilento.

Cents/lb 40 35 30 25 20 15 10 5 D J F M A M J J A S O N 2009 2010 Refined, spot

Cents/lb 40 35 30 25 20 15 Crude Refined

Crude, spot

10 5 0

VALUE-ADDED PRODUCT With its technology, GlycosBio says oleochemical and biodiesel manufacturers can significantly increase the value of crude glycerin by converting it into valueadded chemicals instead of simply refining the product. A 20,000 tonne/year plant in Malaysia using its technology can use an average of 30,000 tonnes/ year of crude glycerin, depending on the chemicals to be produced, said Cilento. “These manufacturers can increase the value of crude glycerin

D J F M A M J J A S O N 2009 2010



by 10–15 times using our technology, compared to a value of two to three times by just converting them to refined glycerin,” Cilento noted. Crude glycerin’s current price also gives it a competitive advantage over sugar, which is what many industrial biotechnology companies are currently using as feedstock. “In using crude glycerin, we also see reduction in

commodity risk compared to food-based feedstock like sugar,” Cilento added.

PRICE RISING The average sugar price worldwide has been climbing from the mid-15s cent/lb range seen in May to the high 20 cents/lb range seen in November. ICIS assessed the average crude

glycerin price in Asia this year at 9–14 cents/lb CIF (cost, insurance and freight), China, while the average price of US crude glycerin this year was pegged at 5–11 cents/lb FOB (freight on board), US Gulf. Refined glycerin prices in Southeast Asia this year were assessed from the mid-20s cent/lb range seen in August, to as high as 37 cents/lb in late November. Average US vegetable-based refined glycerin prices also slightly climbed in November to 32 cents/lb, compared with 27 cents/lb seen in July, as assessed by ICIS. The recent increase in glycerin prices was driven by spikes in crude palm oil prices in Asia, while in the US, higher glycerin prices were blamed on tighter supply in the absence of biodiesel production. Additional reporting by Serena Seng in Singapore and Judith Taylor in Houston


December 6-12, 2010 | ICIS Chemical Business | 21

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