Jeff Timm was Program Chairman of the recent BioPlastek 2011 Forum held in New York City on June 27-29, organized by Schotland Business Research Inc. Here is the first in a series of his personal thoughts and observations from the conference.The following three observations were reoccurring themes throughout the various conference presentations.
There is currently much activity in many recent company announcements around making renewable building blocks for purified terephthalic acid needed to manufacture 100% renewably sourced PET bottles.
Regardless of who eventually wins this technology war, an “ah hah” moment for me is the complexity of obtaining bio-content renewable raw materials for these new bio-chemistries (converting green xylenes into pure p-xylene as feedstock for TPA renewable PTA for PET, renewable furan dicarboxylic acid (FDCA) as a replacement for TPA, so as to produce PEF instead of PET or even non-bottle related renewable hydroxyl (alcohol) group polyol for polyurethane, etc.).
If we assume that there will be retrofitting of existing petrochemical plants so they can utilize these new renewable materials where they currently exist in Texas, Louisiana, etc. vs. building new large capacity “green field” facilities, how will orange peels from Florida (utilizing Pepsi’s stated objective for example of their own agricultural waste in “closed loop” systems-Tropicana oranges for Pepsi bottles) or switch grass from purposely grown energy crop fields be collected and transported from far flung locations to the existing polymer manufacturing plants in the quantities needed in an economical way? Many of the new bio-chemistry manufacturers are moving aggressively to lock up long term feedstock supply commitments; however, there is a tremendous amount of infrastructure and new value-chain creation that needs to be put in place for this to happen.
A related issue is how does the bioplastics industry obtain agricultural land that can be redirected to non-GMO and/or purpose grown energy crops. The industry needs to think about the quantum shift in agricultural subsidies, legislation and logistics that has to occur for this transformation to happen.
A second observation is that “collaboration will be king” and is the key to moving the whole industry in the aforementioned raw material situation as well as the other end of the value-chain-the marketing effort. Companies can no longer “do it alone”. Open innovation and a shift in corporation’s “soft” skills (team-orientation) dictate collaborative success. Great examples of collaboration are between ag companies and traditional polymer companies (the old NatureWorks structure-Dow and Cargill) and formal business arrangements between polymer companies and consumer product companies (Braskem-Green PE and P&G-Pantene®). Newer developments in the plastics industry are polymer raw material suppliers that leap-frog over the next stage in the value chain and collaborating directly with the brand owner (ZeaChem through the commercialization of “drop-in” bio-based chemicals, likely C3, and other products and P&G). In essence this is working with the customer’s customer. Brand owner collaboration with other brand owners creates opportunities (Coke and Heinz-PlantBottleTM) which are another new market dynamic.
A final subtle observation that permeates throughout this entire discussion is that a “success” must be defined as including the brand owner in this collaborative process regardless of where on the value-chain the collaboration occurs. Understanding and starting with the brand owner or end-user requirements (performance, processability, and price), not forgetting end-of-life choices (recycle, biodegradation) and working backward throughout the product design stages and marketplace realities are keys to success. By following this approach the sideline debate over renewable biodegradable vs. drop-in bioplastics will disappear as the choice will be obvious based on the brand owner requirements.
Jeff Timm has spent more than 35 years in the plastics industry with Fortune 100 companies with positions ranging from sales and marketing research to leadership roles in product and business management and business development. The last six years have been as managing principal for Timm Consulting, Franksville, WI, a plastics business and market development consultancy focusing on bioplastics. Timm can be reached at email@example.com or www.linkedin.com/in/jefftimm.