Western Innovation, Eastern Markets
Asian markets offer vast potential for many emerging biobased chemicals
Asia’s robust manufacturing sector is luring Western biorefinery developers to the East, where myriad green chemicals are in high demand due to the growth of industry-and lack of red tape-in the region. Asian demand for acetic acid, for example, is expected to grow 8 to 9 percent per year, while U.S. demand for the product is expected to remain relatively flat. And that’s just a small part of the story.
Houston-based Glycos Biotechnologies Inc. is developing a biorefinery project in Malaysia that will convert renewable feedstock, such as crude glycerin from biodiesel production, into biobased fuels and chemicals. According to GlycosBio Chairman and CEO Rich Silento, the facility will be located near ports in Malaysia and Singapore, which will make it easy for the company to sell its green chemical products into Asian markets. “A lot of chemical industries are doing much more business activity over in China and that part of the world to get near the emerging markets,” Silento says. “There is a large commodity market there, and given the small volumes we are going to be producing, we can easily sell into those markets without any product or commodity risk.”
However, access to emerging markets isn’t the only reason GlycosBio has chosen to site its first commercial biorefinery in Malaysia. According to Silento, the region also produces unique feedstocks that match well with GlycosBio’s technology, primarily the waste products that result from the local palm oil refining industry. “Glycerin is one, and free fatty acids is another,” he says. “There is also sugar in the marketplace as well, if need be.”
According to Silento, the business environment in Malaysia is also very welcoming. “It’s really easy to do business there,” he says. “The biggest challenge, honestly, is the 13-hour time difference, that presents a bit of a challenge, but the business community is very welcoming and the government agencies you have to deal with are very helpful.” While it can take several years to finance and permit a biorefinery project in the U.S., Silento says GlycosBio will break ground on its facility after only 18 months of work. “That is a very short timeframe,” he says. “You can move very quickly in that part of world. If you have willing participants and you want to move aggressively from a schedule perspective, you certainly can.”
Bioamber, a joint venture between U.S.-based DNP Green Technology and France-based Agro-industrie Recherches et Développements (ARD), also intends to build a commercial-scale biorefinery in Asia in the future. In the short, term however, the company has taken a different approach to penetrating the Asian market. Bioamber (see page 15) recently signed an agreement with Mitsui & Co. Ltd. granting the global trading company exclusive Asian distribution rights for its biobased succinic acid. While the Asian market offers the biggest growth opportunity for biobased chemicals, DNP Green Technology President Jean-Francois Huc says it can be a difficult market for Western companies to penetrate.
Vice president of NDP Green Technology Mike Hartmann says being a small, private U.S. company can make it challenging to meet with the large chemical companies in Asia. “Mitsui & Co. has been instrumental in opening doors. It gives us a lot of credibility,” he says.