Unilever and Nufarm, a global agriculture innovator, are partnering to develop and commercialise a crop of the future. The project aims to cultivate a crop with significant biomass to produce sustainable oils. The biomass oil – derived from plant material, including the leaves and stems – will be a source of fatty acids, a core base ingredient for our laundry detergents and beauty and personal care products. Typically, plant oils like sunflower and canola are produced in the seeds and fruits. The breakthrough of this technology is that the oil will be grown using the entire plant – including the leaves – in crops like cane and sorghum (a cereal grain).

Nufarm has previously developed and commercialised a variety of sugar cane called energy cane, a sustainable crop which generates significantly more plant matter and sugar than traditional sugar cane. Our investment will leverage recent breakthroughs in biotechnology to develop a new, commercially viable variety of energy cane that can also produce biomass oil.

BASF’s businesses are now grouped into two parts; core and standalone. Core includes i) Chemicals ii) Materials iii) Industrial Solutions iv) Nutrition & Care. Standalone has i) Surface Technologies ii) Agricultural Solutions. Note – Nutrition and Care is where the surfactants (most of them) are. In terms of Sales / EBITDA / EBITDA Margin % for each, the scorecard ( € Billions) is Core: 40.5 / 4.6 / 11% and Standalone: 25.2 / 3.5 / 14%

China’s a big deal for BASF’s future. They putting € 10 Billion into the Zhanjiang verbund site. It is expected to generate € 4 – 5 Billion in sales and € 1 – 1.2 Billion in EBITDA by 2030. That’s a far higher margin than the company historically has done and around a quarter of the EBITDA generated today by that Core group. The China project is key for surfactants with EO and a range of nonionics up to 215,000 tonnes of capacity (just for nonionics).

..more high profile concerns about EUDR within the EU itself. None other than German Chancellor Olaf Scholz wants to postpone new EU rules. Scholz told a conference on Thursday in Berlin that he had discussed the EU Deforestation Regulation with European Commission President von der Leyen and “advocated … that the regulation be suspended until the open questions raised by the BDZV [German digital and newspapers publishers association] have been clarified.” In March, the publishers’ lobby wrote to the German government and the Commission criticizing “impractical requirements” and a “drastic bureaucratic burden on companies.” It asked the Commission to “mitigate the risks, sanctions and burdens” created by the new law, which is set to apply from Dec. 30. Now, I’m not sure how or why this publisher’s group got involved. Is this the press somehow doing its job under a united front (not sure I like that, by the way) or is there some enlightened self-interest. Can someone opine?

As we’ve written here before, there is a battle around ethylene oxide that is being waged largely out of the spotlight. The implications for surfactants, however, could be very big. I point you to a recent article in The Hill magazine that talks about “Cancer Alley” a term they give to an 80 mile stretch of the Mississippi from New Orleans to Baton Rouge. In the article, they note that “Researchers from Johns Hopkins University measured for a chemical called ethylene oxide (EtO), which increases risks of cancers including breast cancer, in a Louisiana industrial corridor. The researchers found concentrations of the gas at significantly higher levels than modeling from the Environmental Protection Agency (EPA) shows, said senior study author Peter DeCarlo.

DeCarlo said that specifically the results suggest that polluters are underreporting how much EtO they emit — by a factor of between two and 10.” 

The key subject is chemical distribution which continues to have a hot streak in the deal space. Some interesting points:

· From 2010 to 2020, an annual average of 40 chemical distribution deals were completed globally [that’s average of 40 per year!]. From 2021 through 2023, that figure rose to an average of 65 deals per year, a 60%+ increase.

· A recent survey of chemical manufacturers by Boston Consulting Group found that 76% of principal suppliers expect the share of their outsourced sales to increase within the next three years. [We’re going to dig into that BCG report in just a bit]

· Chemical distribution is also a highly fragmented market. According to the most recent ICIS list of top chemical distributors published in May 2024, the top 5 distributors in North America had a market share of 54%.

More Regulations: A reader drew my attention to a New York State Assembly Bill # A6969B called in short “the beauty justice act” and further defined as a “AN ACT to amend the environmental conservation law, in relation to the regulation of ingredients in personal care products and cosmetics” Ugh – so what is it about. The act references an NIH study, that found that women of color who regularly used dyes and straighteners had a 45 percent higher breast cancer risk. White women faced a 7 percent higher breast cancer risk. OK – the bill’s aims seem noble enough but the list of restricted substances is a bit of a head-scratcher. It contains Ethylene Oxide (CAS # 75-21-8) – (Yes I checked it. That’s EO). So what does this mean?

A UK company, Econic, is using captured carbon dioxide to build renewable chemicals and have made good inroads into polyols for coatings. Their next frontier is surfactants, built on novel structures. Worth keeping an eye on.

Geno (formerly Genomatica) is well known to many readers. Their recently formed Joint Venture with Kao, Loreal and Unilever, called Future Origins, is focused on making detergent range (C12 - 14) alcohols via fermentation. Renewable carbon obviously. The technology is the original LS-9 E. Choli fermentation, acquired by Geno from the Renewable Energy Group.

A brand new company coming out of UK’s Cambridge University, Bravely Cultured, has new surfactant chemistry derived from marine biology. Early stage. Very interesting.

We don’t often write about the Japanese consumer product and chemicals company, Kao here, but I got a press release that talks about a major new investment in the US. And it reads, part:

Kao Corporation has decided to build a new tertiary amine production plant in Pasadena, Texas, United States, mainly to meet growing demand for sterilizing/cleaning applications but also for wide range of other industrial applications.

.. Kao has the world's largest production capacity [of tertiary amines][ with three production sites in Japan, the Philippines, and Germany.

Early in the month, huge news from Indorama Ventures (owners of the old Huntsman North America Surfactants business and, of course, more recently of Oxiteno, along with legacy Old World Industries Assets). The key point is that the company’s IOD (integrated Oxides and Derivatives) business has been set up as a standalone pure-play surfactant company called Indovinya, and is ready for a spin-off / IPO. Big news, Indeed The first slug of information came in a March 4th press release, which I’ll reproduce in its entirety here. Below that, I will summarize in bullet point form, the key points from the company’s Capital Markets Day presentations on March 5th.

Stepan is the bellwether of the surfactants industry (says who? Me. I don’t believe they have ever referred to themselves that way). Bellwether – according to the OED means “the leading sheep of a flock, with a bell on its neck. Something that leads or indicates a trend. "Basildon is now the bellwether of Britain's voting behaviour". For non-UK readers, think something like Michigan or Wisconsin or some other so-called swing state. Anyway – what I’m saying is that - how Stepan does in surfactants is a good indicator of how the many private companies or subsidiaries of larger companies – in our industry are doing. Make sense? And look, you Stepanophiles, I’m not likening the company to sheep or saying they are all Basildon men (a key constituent of the great Maggie Thatcher in the 70’s). With me? Good. So Stepan released its 2023 results recently. Let’s dig in and see what’s happening.

In a mid-January press release, Evonik noted that they had manufactured their first product from world’s first industrial-scale rhamnolipid biosurfactant plant. And from hereon, I’m quoting the release:

Evonik has manufactured the first product from its industrial-scale facility for sustainable biosurfactants that has been completed ahead of schedule at its site in Slovakia.

New triple-digit million-euro facility in Slovakia completed ahead of schedule

Meets high demand for biobased, biodegradable rhamnolipids for cleaning and personal care applications

Latest milestone toward sustainability-driven biosolutions

Early in the month, Holiferm made an encouraging announcement. In summary the company raised £18.5M ($23.7 M) to scale up to 15kta bio-surfactant capacity from Rhapsody Venture Partners and Clean Growth Fund. BTW – I had the opportunity to tour the Holiferm site in Wallasey (near Liverpool) in early November. Very cool. I wish Ben the team much success. They’ll be presenting at our conference of course in May.

LAB and LAS: - It’s hard to get market information on these two pillars of the surfactants market in North America or Europe but the Asian market affords some transparency for us. LAB prices in Asia for November were in the range of $1,440 to $1,440, off by a modest 1.3 – 1.4% since last month. The balance of the LAS market approaches long as China demand remains steady but elsewhere the slow winter season kicks in. Notwithstanding the LAB direction, LAS prices in the region are nudging up by 1.5 – 1.7% into the $1,270 - $1,370 range vs a month ago , in an attempt by producers to improve threadbare margins.

As regular readers know, we like to artfully weave into these blog postings, subtle promos for various business interests of the author. Most of the time, you hardly notice them. But I actually want you to notice this one. So here we are: Shameless plug for the upcoming Surfactants Business Essentials Course (Virtual Version) produced and taught by me. In partnership, of course with the great I.C.I.S. The next 3-part course mini-series starts up Thanksgiving week (in the US); November 20 – 22 in the rest of the world. We hit Singapore at 6PM (local time), The UAE at 2PM, London at 10AM and for those really keen to pack in a full pre-Thanksgiving professional enrichment, New York at 5AM. If someone could join me in this pre-dawn classroom in the US Eastern timezone, I will buy you a coffee! We go back to first principles – What is a hydrophobe? A hydrophile?.. and where do they come from? And we dig deep into the complex economic drivers in key supply chains like fatty alcohols and ethylene oxide. We talk about your favorite companies – customers, suppliers and maybe even your own employer. We’ve been running this course for over…

Happy Labor Day. Not sure what that’s supposed to mean, really. Perhaps – be happy that you are not being forced to work on this day. So the greeting applies only to those not working shifts or in many service industries or in other blighted corners of the economy where workers are working because they have to and are most decidedly not happy about it. Fine. I recently hosted for P2, an Artificial Intelligence / Machine Learning / Self Driving Labs (AI/ML/SDL) workshop at the University of Toronto in partnership with the recently formed and generously financed, Acceleration Consortium there. My opening remarks went like this: I have a newspaper cutting in my study that talks about my great-grandfather who went down the pit (coal-mine ) at the age of 9 to get coal out of hard to reach pockets. He managed to raise a family despite the less than optimal work-life balance. His son, my grandfather, lived then in more enlightened times and went down the pit at age 13. He also managed to raise a family and my father avoided the pit altogether. He went into an office at age 16 and was working when the weekend as…

It’s a hot blog summer and we are unashamed about it. While our peers in publishing, like The Economist, are putting out a summer double issue (ie skipping an edition), we’re grinding it out in the hot humid months, giving you supreme value for your subscription dollars. So, we have the news then music, followed by personal notes. The News As always, credit for almost all our news goes to my partners, the great ICIS. I’m a long-time subscriber. Why not you? The news theme for this week is uptick (price wise not necessarily sales or volume-wise.) Not sure why or what this means but it’s there. Finally a rebound in Asia prices as ICIS great Helen Yan reports that the Asia fatty alcohols ethoxylates (FAE) market continues to face tightened supply and escalating cost of feedstock fatty alcohol mid-cuts C12-14. Aug-Sept plant turnarounds tighten supply Feedstock C12-14 mid-cuts fatty alcohols spot prices surging since mid-June China stimulus measures to boost regional demand On 3 August, FAE mols 7,9 spot prices were assessed at $1,450/tonne CIF (cost, insurance & freight) SE (southeast) Asia, up $25/tonne from the previous week, ICIS data showed. A regional 85,000 tonne/year FAE plant is scheduled…

Baloney. We were just jealous of the flashy cars, big houses and women with perfect teeth. Now that I have the cars, the house and such, I’ve realized that there is even more to be jealous of – freedom of speech, economic freedom, the idea that all men are created equal. Things that the declaration really spelled out to a candid world

Independence Day Edition My first American fireworks: Princeton, NJ, July 4th 1985. We sit on the bonnet (hood) of the car, leaning back on the windscreen (windshield) looking up, waiting for something to happen. A crummy high-school band starts up and a choir or whatever gets going – Oh-oh say can you see, by the dawn’s early light. Makes no sense. Apparently the Yanks have an even more boring national anthem than we do. What so proudly we hailed at the twilight’s last.. More nonsense. How much of this do we have to sit through before the fireworks? Whose broad stripes and bright stars. Good grief. This is bollocks. Shoulda brought more beer. O’er the ramparts.. Ramparts eh.. there’s that wine in the boot but it’s probably warm by now – anyway it’s a work day tomorrow, flying out 6AM so.. better just make this one last. And the rockets’ red glaaaaare… BOOM BOOM WHOOSH.. Wow ****! The bombs bursting in aaaiiiiirr… BANG, BANG, B A N G Bloody ******’ ‘ell… BANG ! Now that’s fireworks, baby! “Is that the national anthem?” “Er.. yeah..” “Oh – Frickin’ Wild. Is it always like this?” “Erm .. yeah, well on July 4th…..

Greetings from Rome! Welcome to our CESIO edition. If you’re looking for a summary of the presentations and discussions at CESIO, sorry, we don’t do that here. You should have bought a ticket and shown up. It was an outstanding event, well produced and organized. Kudos to CESIO president, Tony Gough. Alex, Chantal and the rest of the team. I’ll tell you about my experience there if you’re interested. I had the usual crazy title for my talk and once again the organizers kindly indulged me with a speaking slot to kick off the business track on Wednesday morning. Dinosaur eats Unicorn was the paper title that got folks in the room at 8.30AM after a late night prior at the gala dinner. Session chair, Felix Mueller, reminded me that he introduced me on my first occasion as a CESIO speaker in 2011. He also reminded the audience that, according to my last talk in Munich, 2019, I was friends with Debbie Harry (Blondie) and that my talks are invariably interesting, thought provoking and entertaining. So.. no pressure then. We kicked off with a snippet of Blue Öyster Cult (Godzilla – Dinosaur – geddit?) to ramp up the dopamine in…