Surfactants Monthly - March 2024

Quick Promos :

First – to subscribe to our monthly emails with a link to the blog – just put your name company and email in here Here’s the link. I promise to only send one marketing email per year to this list and that relates to our surfactant conferences. This years was already sent last month.. so..

Second – I’m told that for the May 9 – 10th Conference we will sell out the top floor of the Jersey City Grand Hyatt. This, in my mind now, is 4 conferences in 1:

1) Consumer Product leaders, featuring Clorox, Colgate, Unilever Household, Unilever Beauty and L’Oreal.

2) Biosurfactant deep-dive featuring Holiferm, Ruby Bio, Locus, Sasol, Amphistar, Integrity and Dispersa.

3) AI/ML Impact featuring University of Toronto, Potion AI and C&EN

4) Pillars of the Industry with ExxonMobil. American Cleaning Institute, ICIS, Colin Houston and Associates, IP Specialities, Univar Solutions, Ballestra and Inolex.

The entire event is fueled with a supercharge of mindfulness delivered in a kick-off seminar (included with the price of admission to the conference) by legendary coach and transformational retreat leader, Nicole Smith-Levay.

This speaker roster, you’ll agree, is amazing and bursting at the seams. So I recommend you book now to avoid disappointment when it sells out. Here’s a link straight to that site.

Third – I’ve had a bunch of questions about training. We have our next public Surfactants Business Essentials Course coming up, the day before the conference, in person on May 8th in New Jersey. Capacity is limited to ensure a quality experience. More information and links to register here. Training Link . We also do custom training and management seminars, your site or ours – or online if you like. If you’d like to discuss, please drop me an email

The News

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.

Bangkok, Thailand – 4 March 2024 – Indorama Ventures Public Company Limited, a global sustainable chemical producer, unveiled a significant evolution in its business strategy and outlined how major structural shifts are re-shaping the chemical industry, creating opportunities for the company to emerge stronger from the current downturn and benefit from its unique global model in the longer term.

Ahead of the company’s annual Capital Markets Day (CMD) in Bangkok on 5 March, Mr Aloke Lohia, Group CEO of Indorama Ventures, pointed to industry mega-trends that are forging fundamental long-term changes in global chemical markets, prompting a significant review of the company’s strategy. He described how subdued local demand in China is driving overcapacity and fueling cheap exports, while low feedstock prices in North America are adding to supply due to increased competitiveness. At the same time, unprecedented macroeconomic and geopolitical headwinds are weighing on global consumption, impacting Indorama Ventures’ margins and volumes in FY23, and leading to a 53% decline in earnings. Mr Lohia said feedstock prices in Western markets will increase over time as peak oil demand draws closer and refineries shut down, while the reverse will occur in emerging Asian markets as capacity rises, driving feedstock costs lower. Indorama Ventures’ unique integrated manufacturing model allows it to benefit from lower feedstock prices through ‘make or buy’ strategies that reduce working capital and interest costs.

At its CMD, the company will outline details of its new IVL 2.0 strategy to adapt to the unprecedented industry conditions. It will deleverage its business in a prolonged environment of higher interest rates, while right sizing its operations and optimizing competitiveness to improve shareholder returns over the next three years and emerge stronger as demand normalizes in the longer term. Indorama Ventures is accelerating the transformation programs it started in 2021, Including implementing new data management tools and intelligent dashboards that allow its experienced managers to predict market changes in real time and respond to shifts more effectively.

Mr Lohia said: “Change is a constant in our industry. We have embraced similar seismic events in our thirty-year history and emerged stronger than before. In 2023, we recognized that the ecosystem has changed, and what worked for us in the past will not work going forward. We had to devise a new strategy to operate successfully within the new ground rules, leveraging the highly successful global model we built over decades. In recent months, each of our businesses has undergone a stringent review, with detailed plans now in place to optimize our assets, processes, and our organization, and focus on enhancing earnings quality over the next three years.”

Today, Indorama Ventures has an unparalleled global footprint, with leadership in sustainable and growing markets, following a remarkable era of expansion during which it made some 50 acquisitions over 20 years to build its unique global model. Mr Lohia expressed continued confidence in the long-term growth potential of its business, which is tied to macro-consumer trends as populations grow and modernize and demand more sustainable products that improve their lives and the environment.

Under IVL 2.0, the company will optimize its asset footprint, improve cashflow, and significantly reduce debt levels as it switches to new priorities of enhancing earnings quality and maximizing shareholder value. Measures include a $2.5 billion reduction in Net Debt to around $4.3 billion in 2026, including generating $0.8 billion in cashflow from operational improvements and a further $1.7 billion from strategic corporate actions including divestments, asset actions, and select business listings. These steps are aimed at reducing its Debt to EBITDA ratio to less than 3x.

Mr Lohia said: “Our new strategy is a significant financial pivot. Now that we have the scale, we will leverage our global footprint and strong client relationships and optimize our costs so that we can generate enhanced long-term sustainable profit growth. We are also deleveraging our balance sheet, which will give us more flexibility to restore our company to a more sustainable growth path based on strict capital discipline and international standards of leverage.”

Four strategic objectives will underpin transformation over the next three years. First, the asset optimization program aims to increase the company’s operating rate from 74% to 89%, including moving to lower-cost facilities and right-sizing manufacturing capacity. Second, the launch of Project Olympus 2.0, the company’s cost optimization program, will build on the success of Olympus 1.0 to unlock a further $450 million run rate efficiency gains by 2026. Third, the sale of non-core assets and other value-unlocking strategies aims to generate about $1.3 billion in cash proceeds. Finally, the company is leveraging its leadership in sustainability innovation to drive a $350 million per year value uplift.

Integrated Oxides and Derivatives (IOD), the newest of Indorama Ventures’ three business segments, will be renamed ‘Indovinya’ as management focuses its Downstream portfolio in high-potential markets including Home & Personal Care, Crop Solutions, Coatings & Solutions, and Energy & Resources. As part of the action, the segment’s Intermediate Chemicals assets, comprising integrated PEO, integrated EG and MTBE, will move to Indorama Ventures’ Combined PET (CPET) segment. This will further optimize and strengthen CPET’s integrated offering.

These bold measures build on the company’s far-reaching transformation programs already in place since 2021, as well as the strident steps taken in 2023 to improve competitiveness and generate operating cash flow. During the year, Project Olympus 1.0 drove $527 million in run rate efficiency gains by 2023. From 1Q24, the completed rollout of the SAP S/4HANA enterprise system will unlock further value as the spine of the company’s digital transformation strategy. As part of its asset optimization program, in Q423 the company undertook a $308 million non-cash impairment of its partly completed PTA-PET plant in Corpus Christi, Texas, which is on hold while the joint venture partners reassess its future. Indorama Ventures’ succession planning program has identified a next generation of managers as its three business segments work towards becoming increasingly independent operations.

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The Capital Markets Day presentation (that’s the link to the materials with transcript) was quite interesting. Here are some key points – first regarding IVL (Indorama Ventures Ltd.), then focused in on Indovinya (the new pure-play surfactants company).

IVL Overall:

· The loss of volume during de-stocking in last 18 months will be recovered during this 2024-2026 business plan. This is in line with what I have heard from others in the industry.

· IVL is the only shale to PET integrated producer in the world, which the company claims, and I agree, is a significant moat for the business.

· IVL volume drop in 2023 was primarily in Europe which dropped by 20%. That is a big deal and somewhat in line with what I have heard from others although others were certainly not immune from volume drops in North America.

· Shareholder key metrics will shift from EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and ROCE (Return on Capital Employed) to FCF (Free Cash Flow) and EPS (Earnings per Share). This to me suggest a greater capital discipline. Subsequent comments bear this out.

· IVL plans to increase their operating rate (that’s a measure of capacity utilization) from 74% to 89%. Now – 74% to me seems quite low – although perhaps understandable coming off a 2023 where volumes dropped substantially, especially in Europe as noted above. As a target, 89% seems reasonable, although I expect there are stretch targets in place for 90+% whichi is where businesses like this really start to sing.

· There are 7 sites on the bubble in terms of continuing viability, all in the West and in the CPET and Fibers segments (not in surfactants).

· Non-core assets will be divested, representing $150M of revenue in the Americas and $200M revenue in Europe and Asia.

Indovinya (New Pureplay Surfactants Company):

· The new company is headed up by Alastair Port and is billed as the number 1 nonionic surfactant producer in the Americas.

· The new company will be created by carving out from the parent and shedding the intermediates business, currently part of IOD, to a new home in the CPET business. Intermediates includes Ethylene at Lake Charles, LA, EO and EG at Clearlake, TX and MTBE at Port Neches. The following slides provides a good illustration.

· The new company is described as the leading EO and Surfactant producer in the Americas, with #1 positions in non-ionic products, and #1 supplier of home care fabric softening products, and #2 ethoxylation company globally. The following slides shows more details on the business makeup.

· I found this slide interesting.

· The presentation notes that – “Bio-based products and “free from” products are of particular interest as we see consumers becoming more and more attuned to natural ingredients.” Of course, included in this is the buzz around dioxane and EO free products. That is one risk factor (not mentioned).

· The company goes on to note an interest in M&A with the following – “the market has many smaller players and some interesting technologies which would complement our existing portfolio and which we could globalize both organically and inorganically, whilst increasing our HVA content and further penetrating a fragmented market space

So – all very exciting stuff and I am particularly enthused that we now have another pure-play surfactant company potentially soon to be on the public stock markets joining the mere handful or less, including Stepan, Galaxy and Croda. I hope for selfish reasons they are not scooped up during the process by a strategic acquiror like BASF (very unlikely) or SABIC (possible) or CEPSA (possible). Hey – good luck to Alastair and Indovinya. !

At Sasol; a significant change at the top. Brad Griffith, EVP of Chemicals, will retire on June 30th. He’s had a long and distinguished career since joining predecessor company Vista in 1991. The company, at that point, was owned by RWE-DEA. He graduated from the University of Houston in 1989 and first spent a few years with Mobil as an Engineer. By my calculation, this makes him a young lad (anyone younger than me is a young lad) and so I expect we may see more of Brad in the coming years in and around our industry! Stepping into Brad’s big shoes is Antje Gerber, until recently, President of the Nutrition, Care and Environmental business at Arxada – the former Lonza Specialty Ingredients business, bought by Bain and Cinven PE’s. Best of luck to Antje – and to Brad! And to Sasol. I’m enjoying the company’s foray into biosurfactants with Holiferm and keen to see how far into the mainstream they can take this technology.

Brad (in the cool shades) and some Lake Charles luminaries digging in.

P&G has done it again. You know, in my Surfactants Business Essentials course, I have a headline that I use to describe the laundry market category – “Not Boring” and here – as reported in the great HAPPI magazine, further evidence of that. Procter & Gamble rolled out Tide Evo, a fiber-based form that P&G calls a new chapter in laundry care. It debuted, mid-March at SXSW in Austin, TX. Tide Evo will be available in Colorado next month, before rolling out nationally. According to P&G, Tide Evo makes laundry day easier and reduces the environmental impact of fabric care.

"Today marks a significant milestone for Tide, as we unveil Tide Evo at SXSW 2024, marking a new phase of innovation in laundry care," said Sundar Raman, chief executive officer, P&G Fabric & Home Care. "Tide Evo embodies over a decade of research and development, signifying a major advancement in how we approach cleanliness and efficiency in our daily lives."

Tide Evo is said to leverage tens of thousands of minuscule fibers, creating layers of soap without unnecessary liquid and fillers. Its instant activation in water ensures efficient cleaning. It incorporate six powerful layers of 100% concentrated cleaning ingredients in each fiber, offering superior cleaning power. According to P&G, Tide Evo is five times more effective at removing common stains than the leading competitive brand bargain detergent.

Moreover, Tide Evo is manufactured in a facility powered by renewable energy and features Forest Stewardship Council certified recyclable paper packaging, eliminating the need for a traditional plastic bottle. The lightweight laundry tile is also designed for cold water washing, enabling consumers to save up to 90% energy compared to washing in hot water cycles.

The Wall Street Journal fleshed out more details. First with some market data: Liquids still dominate the $9.3 billion market for laundry detergent in the U.S., with 70% of dollar sales, according to market researcher Circana. Packets and tablets, such as Tide Pods, are at nearly 24%, while powdered detergents are the remaining 6%. Then with a cost per wash analysis: P&G is recommending pricing of $19.94 for a box of Tide evo with 44 tiles, which is the same suggested price for a 45-count tub of Tide Power Pods + Ultra Oxi. It recommends one tile for small or medium loads of laundry, and two tiles for a large load.

So anyway, the key point here is that the tiles are woven from ingredients not from any fiber. Particularly relevant in light of last month’s (in last month’s blog) news about potential regulatory action against films. Finally I did a brief patent search but couldn't find anything that could give any clues to the ingredients. Anyone out there know any more?

I remember being first turned on to the prospect of palm oil with no involvement of the palm tree, in around 2008 – 9, when Solazyme (remember them?) first came on the scene. They came to our first conference in 2011 and made quite a compelling presentation about palm kernel (type) oil made via fermentation. Later I got my hands on some of this PKO (regular version and a super-charged version with boosted C12/14 content) and it was technically outstanding. Superb quality and very much fit for whatever chemical purposes you may have had in mind. Of course, as many readers know, the company didn't make it as they could not get production cost in line with that of the humble palm tree. The company changed its name to Terravia, then filed for bankruptcy and the assets were sold ultimately to Corbion. The goal of commercial palm (type) oil remains elusive and sought after. The New York Times (I know, I know, bear with me) in early March published an article featuring 3 companies working in the synthetic palm oil field, at least one of which, I have some familiarity with. They are C16 Biosciences (the one I know), Xylome and Clean Food Group. The article is light on detail and heavy on moralizing (it is the NYT after all) but helpfully provides links to the company websites. It looks like all 3 use yeast to ferment a carbohydrate source (including food waste and sugar of various types). Solazyme, if you recall, used algae. All three companies are quite early stage but they all have products – and good PR. So – who knows – a couple of decades after SZYM, they may bring the dream to fruition. I wish them luck!

In other new technology news, The Office of Clean Energy Demonstrations (OCED), which is apparently part of the US Department of Energy. Announced $1.3 Bn of federal investment into 8 chemicals projects around decarbonization.

I read through the projects here (https://www.energy.gov/oced/industrial-demonstrations-program-selections-award-negotiations-chemicals-and-refining ) and it looks like only one will have at least some impact on surfactants. : That is a project by T.EN Stone & Webster Process Technology, Inc. in partnership with LanzaTech to demonstrate an integrated process to utilize captured carbon dioxide from ethylene production—an important building block for many products—by applying a biotech-based process and green hydrogen to create clean ethanol and ethylene. Of course that ethylene could go on to further use in the production fo EO, alpha olefins, detergent range alcohols and other potential surfactant building blocks. Lanzatech has recently been involved more directly in the surfactant value chain via its partnership with Unilever and India Glycols, with a surfactant made form captured CO2 used in the famous Unilever brand, Omo.

Big brand name for an experimental product !

Elsewhere in the surfactants world, ChemAnalyst reports that Tecnimont (Integrated E&C Solutions), has signed a EPCC (Engineering, Procurement, Construction, and Commissioning) contract with SONATRACH for the construction of a new linear alkyl benzene (LAB) plant, in the industrial hub of Skikda, which lies approximately 350 kilometers to the east of Algiers, Algeria. The contract size is around USD 1.1 billion. The LAB plant will have a capacity of 100,000 tons per annum. In addition to the primary production facility, the project entails the development of auxiliary utilities, offsites, and interconnections with existing infrastructure. Completion should take around 44 months.

Recently, we’ve been bringing you original research and not just in AI. I’ll therefore point you to the December 2023 issue of the journal – Current Opinion in Colloid and Interface Science. It is their Biosurfactants special issue. While the journal claims that it “Supports Open Access” – that’s for other peoples articles and not the case for all of its own articles. Some are behind a paywall. However, I was able to glean some interesting nuggets and, in particular some perspective on the question I’m asked a lot: “Will biosurfactants replace conventional surfactants?”. Now, some of you may be familiar with Betteridge's law of headlines. It is an adage that states: "Any headline that ends in a question mark can be answered by the word no." It is named after Ian Betteridge, a British technology journalist who wrote about it in 2009, although the principle is much older. So, applying Betteridge’s law, the short answer to the question is No. OK good, let’s move on. Alright, alright – let’s consider what the issue has to say and, in summary, the answer to the question is in fact still no. But there is still a large potential for biosurfactants to be a key part of the industry particularly in some niches. Some interesting points:

· A major difference exists between personal care and household care applications. The pH-value of cosmetic products is typically between pH 4.5 and pH 5.5 due to skin friendliness and preservation reasons, whereas cleaning products are mainly formulated between pH 7 and pH 9 in order to assist removal of dirt. di- Rhamnolipids and Sophorolipids have pka values of around 5.5 so the biosurfactants will be deprotonated at pH-values of pH 7 or higher but be protonated (and thus behaving more like a neutral surfactant) to a significant degree in Personal Care applications.

· In personal care formulations, current biosurfactants are mild and stable but have trouble building viscosity on their own. Therefore co-surfactants are needed.

· Jochen Kleinen of Evonik, one of the editors of the special issue, is realistic about the path ahead as he sees it – to quote:

o “[biosurfactants] cannot be simply used as drop-in solutions in current formulations. Their full potential can only be achieved if the properties of the [biosurfactants] are used in an optimum way. The performance profile of [biosurfactants] is different to conventional surfactants which makes comparisons to existing surfactants rather impossible and identification of applications which reward the big effort of development also tedious.”

o And “…yes, [biosurfactants] will substitute some and eventually replace conventional surfactants in some niche applications.” (My emphasis added)

Now to the market news:

With appreciation to ChemAnalyst for some of the news and information used herein.

LAB and LAS:

The US market saw an increase in the price of LAS by about 0.5%, mirroring a similar increase in LAB. Demand for both has ticked up as market conditions show signs of returning to normal with destocking looking to almost have run its course.

A similar uptick was seen by about 1.5% in Europe and slightly more in Asia.

Spot prices for LAB in Asia increased in the range of USD 1,400 to USD 1,50 per MT.

Spot prices for LAS in Asia – USD 1,255 – 1,345 per MT

Ethylene, EO and Ethoxylates:

EO in the US: With increased demand, prices are up a touch at 57 – 59 clb

EO in the US : Also up slightly to USD 1,430 – USD 1,600 per MT.

In Asia, Ethoxylates also eased up to USD 1,175 – 1,425 per MT.

Detergent Range Alcohols:

Reminder. We’re talking here about alcohol’s in the carbon chain length range 12 – 18, regardless of provenance – means they can be petrochemical, oleochemical or other (that would be coal mainly)

In Asia – increased demand and lower stocks along with upward pressure in PKO have continued to push up pricing. Mid-cuts up around USD 1,500 per MT.

A portion of the US fatty alcohol market is served by import and freight disruptions through the Middle East are being felt. Freight rates and lead times are going up. Prices are continuing to move up. Mid-cuts are around USD 1,700 – 2,000 per MT.

In Europe, a similar story, but weaker demand. Midcuts around USD 1,600 per MT.

AI Corner

Interesting article this month in the MIT Technology Review, about a company, Insilico Medicine that claims to have created the first “true AI drug” that’s advanced to a test of whether it can cure a fatal lung condition in humans. The company says the drug is special because AI software not only helped decide what target inside a cell to interact with, but also what the drug’s chemical structure should be.

The article goes on to note that some computer-generated chemicals are selling for big money. In 2022, a company called Nimbus sold a promising chemical to a Japanese drug giant for $4 billion. It had used computational approaches to design the compound, though not strictly AI (its software models the physics of how molecules bond together). And last year, Insilico sold a drug candidate initially proposed by AI to a larger company, Exelixis, for $80 million.

Some AI skeptics say coming up with candidate drugs isn’t the true bottleneck. That’s because the costliest setbacks often occur in later tests, if a drug doesn’t demonstrate benefits when tried on patients. Insilico’s CEO Alex Zhavoronkov agrees its origin in a computer probably won’t speed up what’s left of the journey. “It’s like a Tesla. The initial 0 to 60 is very fast, but after that you are moving at the speed of traffic,” he says. “And you can still fail.”

Still just moving at the speed of traffic

Music Section

In the last few years, we have taken to providing a post – Easter seasonal selection:

This year we have a Pro – Am mixture of hits from Lent and Eastertide. These, to me, are all great classics. The amateurs in this selection are performances by the choir of St. Rose of Lima, Freehold NJ, under the direction of the legendary Janos Major. Proof that it is possible to take an unremarkable raw material (the amateur singers) and make something great. Think about that!

Miserere mei - Tenebrae Choir (Pros)

O Vos Omnes – same – (Pros)

Tenebrae Factae Sunt (Amateurs)

Ours were the griefs (Amateurs)

And.. Worthy is the Lamb (Choir of Kings College, Cambridge – not sure if actually pros, but bloody good! Should be classed as pros. This is the fast version – like if the Ramones sang it… They should have..)

That’s it for this month! So – if you like what you read (and listen to) here, join a couple hundred of your friends and colleagues at the biggest and best, soon to sell out, surfactant event of the year, May 9 – 10th in Jersey City. 4 Conferences in 1 ! See our event page here. https://www.neilaburns.com/events/event-one-4s3tz-n2gda

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