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Saturday June 9, 2012
By EDY SARIF firstname.lastname@example.org
Feeding oleochemical for production of surfactants used in cleaning products
PALM oil and in particular palm kernel oil are essential feedstocks for the oleochemical industry which, in turn, provide critical raw materials such as fatty acids in fatty alcohols for the production of surfactants globally.
Neil A Burns LLC managing partner Neil Burns says these surfactants are used in consumer products such as laundry detergents, shampoos, soaps and many other household, industrial, institutional and personal cleaning products.
“In recent years, demand for these lauric oils has increased markedly and there has been substantial volatility in pricing, contributing in part to a re-arrangement and re-structuring of the oleochemicals and surfactants industries, which is still continuing,” he says at a presentation on Developments & Trends in Oleochemicals for Natural Surfactant at the Palm Oil International Congress 2011, organised by Malaysian Palm Oil Board.
He says that currently, the surfactant industry is worth US$25bil to US$35bil (RM76.8bil to RM107.5bil) annually where 65% to 75% of the usage is in consumer cleaning such as detergents and cleaners, cosmetic and personal care products.
According to news reports, the surfactants industry is generally considered complex because of factors such as the broad-range definition of the term surfactants; a large number of suppliers (more than 500 worldwide); numerous product chemistries (more than 3,500), intermediates and blends; a combination of specialty and commodity products and business; a wide range of applications and customer base; variable captive production and merchant market; and, interproducer business relationships and sales.
Most of the new investment in surfactants is taking place in the Asean region and China. Asia is seen as the strategic growth area for most global surfactant manufacturers. Overall, surfactant manufacturers, even those in Asia, continue to see their margins eroded by increasing feedstock and energy costs and hurdles in building business competitiveness.
Innovation in laundry detergents over the past few years has focused on performance, eco-benefits, fragrance and keeping up with washing machine technology. Average wash temperatures have dropped from around 60°C to 30°-40°C, and in some parts of the world to as low as 20°C. Enzyme and catalyst manufacturers are capitalising on the cold-water trend. For detergents to work at lower wash temperatures, more complex surfactant formulations and a balanced blend of components are needed. From the consumption point of view, this development is in favour of enzymes but not surfactants, since it is with enzymes replacing surfactants that the wash temperatures can be lowered without compromising performance.
The trend toward “green” products is the largest in developed countries. The focus on the use of renewable resources is growing and the surfactants sector has been responding with new environmentally-friendly products. The consumption of “green surfactants” such as alkyl polyglycosides is showing good growth in applications such as light-duty hand dishwashing.
Higher surfactant prices in 2005-2008, reflecting higher raw material costs (such as crude oil, natural gas, and natural oils), resulted in efforts to offset these cost increases by lowering surfactant levels in surfactant-containing preparations such as fabric softeners. After a period of high prices in 2008, surfactant prices started to level off or in some cases slightly declined. In 2009, compared with other chemicals, surfactant prices did not drop much, despite sharp declines in the price of crude oil and plant oils, the ultimate sources of surfactants.
The most important surfactant consuming area is Europe (22 countries of Western Europe and 27 countries of Central and Eastern Europe, or 34% of total consumption), followed by North America including the United States and Canada (27%), and China (17%). The highest growth rates in consumption are expected for China, the Middle East (13 countries) and Africa (56 countries). The growth rates in other regions vary from low (in Western Europe) to medium (in Latin America, which includes Mexico, Argentina, Brazil and Venezuela). Overall growth on a volume basis in the major areas is expected to average only 2.7% annually over 2009-2014.
Burns says that at the moment, the main source for natural surfactant comes from vegetable oils and fats while the rest are from animal sources.
He tells StarBiz that for the future outlook, the surfactant industry needs to find new routes from palm to surfactants and also new sources of biomass, adding that the issue of peak oil has implications for transportation and other essential areas such as heating but not widely discussed were its implications for the chemical industry and surfactants in particular.
“Crude oil-based products end up as alcohol sulfates, ether sulfates, linear alkylbenzene sulfonates (LAB), alcohol ethoxylates, nonylphenol ethoxylates, softener, conditioner, antimicrobial quats and amphoterics that is, in essentially every major surfactant class used in every class of detergent, personal care, and industrial cleaning product. Try maintaining basic personal, household, and institutional hygiene for a day without oil. If the prospect of an ultimately disappearing supply of oil does not keep you awake at night, then the recent trends in pricing and its volatility surely will,” he says.
“Since the oil embargoes of the early 1970s, the surfactant industry has looked to the oleochemical value chain as the counterbalance to a crude oil-based system. Since the early 1990s, the adoption of palm- and coconut-derived oleochemicals as ‘the answer’ to a depleting and non-renewable resource has accelerated. Although perfectly-fine feed stocks, palm and coconut oils are not the answer. In recent years, as many supply chain professionals will attest, the vegetable oil market has started to behave increasingly like the crude market.”
Burns says products such as palm and soybean that could be used as food (as they have been for thousands of years) and fuel (as they have been recently in biodiesel) are inevitably going to take some pricing cues from the major fuel, which is crude oil.
“Today, the pricing of key feed stocks such as lauryl alcohol is following, as one would expect, the vegetable oil markets, which in turn seem correlated with the crude oil markets. Petrochemical-derived alcohol is apparently offering little real alternative in current conditions, and the ability to substitute LAB for fatty alcohols has been tapped as far as it can go,” he says, adding that this leaves surfactant producers looking for a viable alternative feedstock source that is renewable and less tightly correlated with the petrol and oleo oils now supporting the industry.
“This is where biomass and the technology developed around energy and, more recently, chemicals, comes in. Biomass, by many definitions, is biological material derived from living or recently living organisms. Clearly this leaves out coal and oil but includes palm oil and the other vegetable oils,” he says.
In the last few years, much time, energy, and money have been invested in trying to find a route from biomass to a gasoline substitute, given the overarching challenge posed by peak oil to the global economy.
A number of companies have been formed for the original purpose of pursuing biofuel alternatives including Amyris, Gevo, Petroalgae, Codexis, Solazyme, Coskata and Virent. Other major companies, such as ExxonMobil, have established business initiatives around biofuel (in the case of ExxonMobil, most notably from algae).
“More recently, however, a number of biomass companies have realised that a quicker and more profitable route to market may initially be via chemicals and not biofuel,” Burns says.
Among the reasons for a “chemicals first” strategy is that the cost barriers are not necessarily so onerous for the production of certain chemicals for application in, say, cosmetics as they are for mass-marketed gasoline. Chemical markets are also more fragmented and niched than the transportation-fuel markets.
This makes it easier for a company to start small, commercialise, and earn money at a scale that is often still that of a demonstration plant for fuel production.
“Given the keen interest of surfactant producers in a good alternative to the oleo/petro duopoly – and the realisation by the biofuel companies that chemicals represent a shorter, quicker route to revenues and profits – we see the emergence of a very attractive area for both parties: biomass for the surfactant value chain,” he says.
This new potential third leg to the surfactant value-chain stool is much more than just conceptual at this stage. He says a key question relating to any such serious initiative relates to the supply of sufficient quantities of biomass at the right price and in a timely manner.
A biomass source that ends up being as tightly correlated in pricing to crude oil as vegetable oil has been is interesting, but not the sourcing revolution that the industry is looking for.
“Algae represent just one such interesting source of biomass. It is an efficient crop, in terms of yield per acre, vs others such as corn and it does not have a competing food application,” he says.
The field of biorenewables is fast moving and chemical feedstock development is clearly a key objective of many of the biofuels-only companies.
As the need for additional options in surfactant feed stocks becomes more apparent, expect more companies to adapt their biomass technology to this area.
“Expect also further partnerships to be formed to accelerate commercialisation. Such partnerships will go both downstream to consumer products or upstream to the biomass sources themselves.”
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