Post on 08-Nov-2018
LIVRO VERDE DO ETANOL
1
LIVRO VERDE DO ETANOL
1
Bio based Chemicals in Brazil
Market achievements and opportunities
Brazilian Development Bank – BNDES
LIVRO VERDE DO ETANOL
2
LIVRO VERDE DO ETANOL Agenda
1. BNDES introduction
2. Recent Programs in Brazil and its results
3. New Finds: Brazilian Chemical Industry Diversification Study
LIVRO VERDE DO ETANOL
3
LIVRO VERDE DO ETANOL BNDES Highlights
Founded on June 20th, 1952.
100% state-owned company under private law.
Key instrument for implementation of Federal Government’s
industrial and infrastructure policies.
Main provider of long-term financing in Brazil.
Emphasis on financing investment projects.
Support to micro, small and medium-sized companies.
Support to Export and Internationalization of Brazilian companies.
LIVRO VERDE DO ETANOL
4
LIVRO VERDE DO ETANOL
Infrastructure
Heavy Industry – Consumer Goods
Technological Development
BNDES Time Line
Imports Substitution
Energy
Agribusiness
Exports
Privatization Program
Urban and Social Development
Social Inclusion
Innovation
Sustainability
Small Business
50’s 60’s 70’s 80’s 90’s 00’s Today
LIVRO VERDE DO ETANOL
5
LIVRO VERDE DO ETANOL
Innovation Investment Financing Infrastructure
Aquisition of Machinery and
Equipment Exports Capital Markets
Aquisition of Capital
goods for Small and
Medium Companies
BNDES Scope of Action
LIVRO VERDE DO ETANOL
6
LIVRO VERDE DO ETANOL BNDES vs. Multilateral Banks
US$ million BNDES IADB World Bank China DB
31/12/2012 30/06/2012 30/06/2012 31/12/2011
Total Assets 350.128 95.522 338.178 993.217
Shareholders´ Equity 25.529 20.194 36.685 70.739
Net Income 4.004 189 783 7.244
Loan Disbursements 78.712 2.046 19.777 N/D
Capitalization (%) 7.3 21.1 10.8 7.1
ROA (%) 18.8 0.2 0.3 0.9
ROE (%) 1.3 0.9 2.1 11.5
IADB = Inter-American Development Bank World Bank China DB = China Development Bank
LIVRO VERDE DO ETANOL
8
LIVRO VERDE DO ETANOL
8
BNDES’ priority: Innovation Policy and instruments to support all companies
NON-REIMBURSABLE
INVESTMENT
EQUITY
FIXED / VARIABLE
INCOME
Closed and Open Mutual Funds
Direct Participation (stake in the company)
Criatec Program (Seed Money)
BNDES INNOVATION Credit Line
FUNTEC
Technological Fund
Projects, including Research,
development and innovation in areas of
national interest
PROSOFT, PROFARMA, PROTVD, PAISS, PRO-Aeronautical, PRO-Engineering, BNDES O&G, INOVA Programs SECTORIAL Programs
PRODUCTS for
SMEs
BNDES Card
BNDES AUTOMATIC
LIVRO VERDE DO ETANOL
9
LIVRO VERDE DO ETANOL Agenda
1. BNDES introduction
2. Recent Programs in Brazil and its results
3. New Finds: Brazilian Chemical Industry Diversification Study
LIVRO VERDE DO ETANOL
10
LIVRO VERDE DO ETANOL Well established sugarcane industry
Brazil has more than 400 sugarcane mills that can crush around 700 million tons per year. Besides that, due to the lack of financial/technological assets, the majority still processing only the
sugarcane juice…
… which represents a great opportunity for those who are able to develop/adapt new technologies to be integrated to these plants, generating synergies and cost reductions for both 1st and 2nd gen ethanol process.
LIVRO VERDE DO ETANOL
11
LIVRO VERDE DO ETANOL Land availability
By improving the low yield of cattle production it will be possible to free large
amount of land for other purposes. Brazilian federal agricultural zoning
considered up to 64 Mha able to produce sugarcane w/o irrigation.
LIVRO VERDE DO ETANOL
12
LIVRO VERDE DO ETANOL Lowest carbon footprint
6.7
9.3
11
2.3
Sugar cane Brazil-bottom
Sugar cane Brazil-average
Sugar cane Brazil-top
Corn USA average
Energy efficiency - BOE output/ BOE input
Source: USDA apud Villela Filho (2011) BOE = barrel of oil equivlent
Sugarcane biomass can provide all primary energy required in its own industrial
process and also generate a surplus that can be added to the power grid.
LIVRO VERDE DO ETANOL
15
LIVRO VERDE DO ETANOL
EUA:
- Renewable Fuel Standard (RFS) – EUA
- Programa de grants do Departamento de Energia (DOE)
Europa:
- European Commission Inniciatives (EU ETS, NER300,
etc.)
Brasil:
- PAISS
Public Policies and the technology run
3
LIVRO VERDE DO ETANOL
24
LIVRO VERDE DO ETANOL Commercial Projects – Industrial Biotech
BNDES Financing for Investment: > US$ 500 M (2011-2014)
• Braskem - Green PE 200 kt - 2011 - Triunfo/RS US$240M BNDES financing for pilot and commercial scale
• Amyris - Farnesene - 2013 - São Paulo US$ 35M BNDES financing for demo and commercial scale
• Solazyme - Specialty oils - 2014 - São Paulo
US$107M BNDES financing for commercial scale
• GranBio - Cellulosic ethanol - 2014 - Alagoas US$130M BNDES equity and financing
LIVRO VERDE DO ETANOL
25
LIVRO VERDE DO ETANOL Project Perspectives
BNDES Financing Forecast: > US$ 1 bi (2015-2017)
Announced projects:
• Solvay-Rhodia / Granbio - butanol
BNDES financing and grant (Funtec) for research
• DSM – Succinic acid from sugar cane - Grant (Funtec) from BNDES
• Elekeiroz / Coskata – butanol
• PHB – Demo plant
BNDES financing for demo plant
• Biobased chemicals research pipeline
Braskem/Solvay-Rodhia/DSM/Elekeiroz/Oxiteno/CTC – CTBE/Embrapa
BNDES and Finep financing and grants for research
LIVRO VERDE DO ETANOL
26
LIVRO VERDE DO ETANOL Agenda
1. BNDES introduction
2. Recent Programs in Brazil and its results
3. New Finds: Brazilian Chemical Industry Diversification Study
public reports at... www.bndes.gov.br google: “BNDES Química Diversificação”
LIVRO VERDE DO ETANOL
27
LIVRO VERDE DO ETANOL
27
Brazilian Chemical Industry - 2013
Imports Exports US$ billions FOB
Trade balance - Chemicals
Source: MDIC/Secex
LIVRO VERDE DO ETANOL
28
LIVRO VERDE DO ETANOL
28
Atract investments Diversify the industry Reduce trade balance’s shortage Design industrial policies that promote investments Post-study : execution focus Authors:
Study – main objectives
LIVRO VERDE DO ETANOL
29
LIVRO VERDE DO ETANOL
Prioritization and
validation S4
Report 7
(Final)
Drawing of development
policies
The study is at its final stage
Business models drawing
Economics detailing
Initial
Prioritization
of segments
Mapping and
Segmentation
Characterization of selected segments
Mapping and best practices
for development policies
S2
S1
1st July 13
9th Sept 13
May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept
SP
S Seminars SP Specialists Panel
Final
Prioritiz
ation of
Opportu
nities S3
Report 4 Report 3 Report 6 Report 5
16th
Sept
14
LIVRO VERDE DO ETANOL
30
LIVRO VERDE DO ETANOL 64 segments and a business perspective
Tar deriv.
Organics
Acrylic acid and deivati
Metacrylic acid and deriv.
Fatty acids and
deriv. Aromatics
Butadiene, isoprene and deriv.
Cellulose and
deriv.
Waxes and
paraffins
Copoly mers
Cumene and
deriv.
Elasto mers
Ethylene deriv.
Methane
deriv.
Ethylene oxide and
deriv..
Propene deriv.
Vinyl
deriv. Lubricants
Fine chemicals intermediaries
Polymers intermediaries
Special Polymers
Aramids Carbon fibers
Polycar-bonates
Polycetals
Special polyamides
High tenacity polyester
Polyether polyols and polyurethane
Politetra-metileno éter glicol
Resinas epóxidas
Polibutilene terephthalate
Catalysts and additives
Food additives Construction
chemicals Leather
chemicals Mining
chemicals
O&G Chemicals
Polymers additives
Catalysts Flavor and fragrances
Dyes, pigments and coatings
Syntetic dyes
Printing inks
Coating
Soaps, cleaning and cosmetics
Cleaning products
Cosmetics
Other
Explo-sives
Refrigerants
Reagents
Glues and sealants
Glues, adhesives
and sealants
Pesticides
Pesticides
Photo graphics
Photo graphics
Chain
Inorganics
Inorganic acids
Alumi num deriv.
Boron
deriv.
Chlorine and
Alkalis
Cobalt
deriv.
Phospho rus and deriv.
Industrial gases
Iodine and
deriv.
Radio active mat.
Nickel
deriv.
Titanium dioxide and
deriv.
Niobium deriv.
Sulfphates Rare earth
deriv. Uranium
Elemental carbon deriv.
Silicon deriv.
Note: Pharmaceuticals, fertilizers and commodity plastics resines (HDPE, PP, PVC and PET are out of the scope of the study.
Industrial intermediaries
Marke
t
LIVRO VERDE DO ETANOL
31
LIVRO VERDE DO ETANOL Market and production factors guided the selection of segments to deep dive
A multi-criteria analysis tool was used to ensure the robustness of the results
• Imports +Exports (US$)
- Average 08-12
• Production (US$)
- Average 07-11
• CAGR imports + exports (%)
• Unit Price (US$/kg)
-Average 08-12
• Trends in Demand
• Degree, current and future, of availability and cost
competitiveness of raw materials
• Degree of technological dominion and the potential
to develop or purchase it
• Availability of qualified labor
• Quality of available infrastructure
• Regulatory restrictions
• Necessity for investment
Dem
an
d C
ondit
ions
Fac
tors
of
Pro
du
ctio
n
Infra-
structure
CRITERIA
• Size
Capital
Legal
Environ. Labor
• Growth
• Value-added
• Technology
• Raw Materials
INDICATORS SOURCE Qu
antita
tive
Quali
tative
• Trends
• Aliceweb
• Consortium
• Validation from the school of chemistry
• Global Insight
• Macro tendencies
• Aliceweb
• Associations
• PIA
LIVRO VERDE DO ETANOL
32
LIVRO VERDE DO ETANOL
Segment
Market BR
( US$B,
2012)
Brazilian
Share
(%)
Global growth
(12-07)
Brazilian
Growth
(12-07)
Imports
(US$ M)
Exports
(US$ M)
Unit Price
(US$ /kg)
Cosmetics 41.8 9.7% 4.1% 12.4% 830 580 5.4
Defensives 9.7 20.5% 7.6% 16.1% 5,400 500 11.3
Animal feeding additives1 1.10 10.0% 3.7% 10.1% 458 310 2.5
Butadiene, Isoprene 1.95 5.7% 1.1% 3.2% 860 740 2.5
Flavors and fragrances 1.20 5.1% 3.3% 6.5% 295 317 5.2
Oilfield chemicals 0.71 3.6% 11.2% 24.6% 85 9 1.7
Surfactants 1.54 5.7% 3.0% 6.9% 315 185 3.0
Aromatics2 2.52 1.6% 3.8% 5.2% 1,154 0 1.2
Polyurethanes 1.50 3.5% 1.6% 5.8% 944 83 2.7
Cellulose derived products 0.33 1.3% 6.3% 1.1% 190 37 3.5
Lubricants 4.5 3.5% 1.0% 2.6% 1,127 209 2.4
Food additives* 0.65 3.0% 3.8% 4.1% 367 625 2.8
Oleo chemicals 0.66 2.8% 8.1% 23.2% 230 179 1.7
Carbon Fiber 0.10 9.4% 7.9% 107.4% 97 0 24.4
Mining chemicals 0.19 4.1% 2.3% 7.6% 93 8 2.2
Leather chemicals 0.38 8.1% 2.8% 3.7% 111 83 1.7
Silicon Derived Products 0.42 3.0% 3.7% 5.2% 190 536 2.5
Construction chemicals 0.17 1.7% 3.7% 5.0% 30 4 1.1
Polyamides 1.28 1.7% 1.9% -5.2% 509 14 3.4
Com
pet
itiv
en
ess
+
-
19 segments were considered highly attractive and were studied in more detail
LIVRO VERDE DO ETANOL
33
LIVRO VERDE DO ETANOL Main opportunities: relevant and growing local markets or local feedstock availability
33
DEMAND DRIVER
Strong local market
OIL PRODUCTION
CHEMICALS
COSMETICS CROP
PROTECTION
FEEDSTOCKS
Feedstocks available/ emerging technology
RENEWABLE
CHEMICALS
Potentially feedstock availability
OLEOCHEMICALS PETROCHEMICALS
CADEIAS A
JUSANTE
CADEIAS A
JUSANTE
Currently feedstock availability
FLAVORS AND
FRAGRANCES .
CHEMICALS
FROM PULP
FOOD ADDITIVES
LIVRO VERDE DO ETANOL
35
LIVRO VERDE DO ETANOL Sugarcane and maize represent ~60% of 1st generation carbohydrate feedstocks; Brazil owns ~ 30% of this total
* Other includes barley (133MT), sweet potatoes (105MT), sorghum (58MT) and yam (57MT) Source: FAOStat (2014) for 2011/2012 season
CARB. - 1ST GEN.
LIVRO VERDE DO ETANOL
36
LIVRO VERDE DO ETANOL In addition to being the most available culture, sugarcane is one of the most competitive feedstocks
Note: The fermentable weight corresponds to carbohydrates that are consumed in the fermentation Source: Nexant (2013), Next Generaton Biofeedstocks: Resources IS Renawables ; Südzucker (2014); Bayer. Landesanstalt Für Landwirtschaft (2014)
CARB. - 1ST GEN.
LIVRO VERDE DO ETANOL
37
LIVRO VERDE DO ETANOL
Source: FAO (2014), harvest 2011/2012; Nexant (2013), Next Generaton Biofeedstocks: Resources IS Renawables ; Bain / Gas Energy Analysis.
AGROIND. RESIDUE
Brazil is responsible for ~40% of the global production of sugarcane residues
LIVRO VERDE DO ETANOL
38
LIVRO VERDE DO ETANOL Sugarcane residues are the most competitive of all the agroindustrial residues
SUGARCANE WASTE FEATURES ONE OF THE
LOWEST PRODUCTION COSTS...
... AND THE LOWEST COST WHEN
THE CONTENT OF FERMENTABLES IS
CONSIDERED
* Cost of bagasse considered as opportunity cost of input, which can be sold for the generation of electric energy Note: The percentages of hemicellulose and cellulose of each residue were considered in the calculation of the cost per fermentable tone Source: Nexant (2013), Next Generaton Biofeedstocks: Resources IS Renawables; Kim & Day (2011); Franco, H. C. J. et. All (2013); North Central Sun Grant Center & South Dakota State University (2013); Iqbal ET al. (2013); Bain/Gas Energy Analysis
LIVRO VERDE DO ETANOL
39
LIVRO VERDE DO ETANOL Biofuels industry will allow evolution of the 2G sugar experience curve
Note: Use of ethanol by Braskem estimated by considering a stoichiometric yield of 54% for the installed capacity of 200 Ktpy Source: CONAB (2013); Braskem (2013); PECEGE/ESALQ (2012 e 2014); CTBE (2013); CTC (2013); Novacana (2014); expert interviews; Bain/Gas Energy analysis
Retrofit of
existing plant
can reduce
Capex
LIVRO VERDE DO ETANOL
40
LIVRO VERDE DO ETANOL 2nd biggest concentration of production capacity of chemicals from biomass is found in Brazil
*Includes projects with undefined location or with location in countries as Italy, India, Canada and others. Note: the data presented on the graph is related to projects that were publicly announced for renewable chemical classes 1 and 2, i.e. the alternative route based on biomass is emerging or in the beginning of business stage. Source: Nexant (2012), Bio-based Chemicals: Going Commercial; Green Chemicals Blog (2012-2014); Biofuels digest (2012-2014); websites of different companies (renewable and conventional chemicals); interviews with experts.
LIVRO VERDE DO ETANOL
41
LIVRO VERDE DO ETANOL Investments are shifting from biofuels to biochemicals
41
In Brazil: information asymmetry and shyness of the local agents (VC and biotech companies)
Source: Cleantech Group