NatureWorks & Ingeo - Innovation Takes Root/media/ITR2014/2014/presentations/...NatureWorks & Ingeo...

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© 2013 NatureWorks LLC

Marc VerbruggenFebruary 19,2014

NatureWorks LLCwww.natureworksllc.com

NatureWorks & Ingeo

“rethink what you think you know …”

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“rethink what you think you know …”• about our business• about feedstocks• about the NatureWorks organization• about capacity and expansion plans• about cost• about performance• about applications• about ….

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Three Era’s of Bioplastics

• Biobased = exception• Litter focused

• New to the world polymers expected to be “all things to all people”

• Biobased = expectation• Performance is king• “biodegradable” where

it’s the highest good

“Bioplasticsare for

Biodegrading”

“Plastics=

Bioplastics”

“Bioplastics sequesterCarbon”

2000’s 2010’s1990’s

Forming Storming Norming & Performing

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Rethink what you think:

about feedstocks …

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Resins

Additives (Modifiers)

Adhesives

Coatings

Printing Toners

Specialty Lactates

Surfactants

Intermediates

CO2 CO2

CO2 CO2CO2

NatureWorks is in the business of turning greenhouse gases into performance products

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Resins

Plant

Sugars

Plants

Additives (Modifiers)

Adhesives

Coatings

Printing Toners

Specialty Lactates

Surfactants

Manufacture

Intermediates

CO2 CO2

CO2 CO2CO2

NatureWorks is in the business of turning greenhouse gases into performance products

1st Generation

Ag feedstocks are a short

termBridging Tool

CO2 + H2O

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Q-2, 2013

• NatureWorks Blair Facility expansion

• From 140,000 to 150,000 ton/year nameplate capacity

We are committed to feedstock diversification:

Investment in innovation and R&D collaboration to grow our Ingeo feedstock portfolio.

Where we are today

Dextrose from corn starch

“Bridging Crop”

GENERATION I: 1st step

Performance materials made by transforming whatever are the right, abundant, local resources

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Where we are today


“Bridging Crops”


Where we are going now

Sucrose from locallyabundant materials such as

sugar cane

GENERATION I: 2nd step


NatureWorks Awards Contract for Front End Engineering of Its New Ingeo™ Production Facility

MINNETONKA, Minn., Sept 24, 2013

“NatureWorks announced today that Jacobs (NYSE:JEC) Engineering Group has been awarded the engineering design contract for the company’s next world-scale Ingeo™ production plant in Southeast Asia …”

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Where we are today


“Bridging Crops”


And next?

CO2 to lactic acid technology?

CH4 to lactic acid technology?

GENERATION NEXT

Next 3-5 years

Lignocellulosics: Sugarsfrom bagasse, wood chips,

switch grass or straw.

GENERATION II

Where we are going now

Sucrose from locallyabundant materials such as

sugar cane

GENERATION I: 2nd step


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And next?

CO2 to lactic acid technology?

CH4 to lactic acid technology?

GENERATION NEXT




Q2-2013 Long Term R&D Partnership Established

…

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From Methane to Ingeo

1 2

Methane is supplied directly to specialized bacteria called methanotrophs

NatureWorks converts lactic acid monomers to long polymer chains making a family of bioplastics

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Methanotrophs convert methane into lactic acid through fermentation

It starts with Methane

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Certification Tools for Ingeo Biopolymers

1 BIOBASED CARBON CERTIFICATIONVerifies that 100% of carbon in Ingeo comes from renewable ag resources via USDA BioPreferred in the US & Vincotte in Europe.

2 GENESCAN CERTIFICATIONIngeo is certified to be free of any genetic material by Eurofins Genescan.

3

4

5 ISCC PLUS & FEEDSTOCK SOURCINGA combination of NatureWorks’ Feedstock Sourcing Certification and the ISCC PLUS program.

6 WORKING LANDSCAPE CERTIFICATES3rd party (IATP) certifies both sustainable agricultural production and the use of a non-genetically modified crop.

ISCC PLUS3rd party (ISCC) certifies the sustainable production of renewable raw materials including chain of custody.

FEEDSTOCK SOURCING CERTIFICATIONNon-GM corn volume equivalent to a customer’s needs is purchased by NatureWorks and added to the stream entering the corn wet mill.

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about the NatureWorks organization …

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Evolving from Geographic to Business Segment Focusto Support Downstream Market Growth

2003-2012 Geographic Orientation

Americas EMEA APAC

2013 – End Market Orientation

RigidsFood

Service FilmsFibers& Non-Wovens

Durables LactidesNew

Business

MarkVergauwen

MarkVergauwen

DougKunnemann

DougKunnemann

StefanoCavalloStefanoCavallo

RobertGreenRobertGreen

FrankDiodatoFrank

DiodatoDaisuke

TakabatakeDaisuke

TakabatakeManuelNatal

ManuelNatal

DanSawyer

DanSawyer

Independently managed global business units to best support and align with downstream market interest

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Supported by a broad & growing Ingeo distribution network

Europe, Middle East, Africa• Resinex (EU 27 countries)• Resinex BMY (Turkey)• Protea (South Africa)• Jolybar (Israel)

Asia Pacific• PTT Polymer Marketing (Thailand)• BP Consulting (Japan)• Unic (China)• First In Colours (Philippines)• Seeplas (Australia)• Poynter Agency (New Zealand)

Americas• Nexeo (USA & Canada)• Jamplast (USA)• Promoplast (Mexico)• Cromex (Brazil)• Oxiquim (Chile & Peru)• Quimicoplasticos (Colombia)• Cosalco (Costa Rica)

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New Asia Pacific Regional Headquarters

Rayong ProvinceThailand

• Bangkok, February, 2013. NatureWorks1st Asia Pacific regional headquarters established

– Warehousing and logistics capabilities, customer service, finance staff, • Engineering Underway for plant II in the region

Investments reinforce NatureWorks' commitment to the region and its support of accelerating Asian market growth

Blair, NEUSA

Tangible Commitmentto the A/P Region

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about price, product, and market applications …

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Properties

• Broad and adjustable physical property set

Price

Sugars vs oil

Favorable yields,

Economies of scale

Feedstock hedging capabilities

Cradle to cradle economics

Preferences

Lower carbon footprint and energy usage

Renewable feedstock

Health Concerns BPA free Phthalates free Acrylonitrile free

Why we’re all here

“The 3 P’s”

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comparative cost stability

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

Jan-

10M

ar-1

0M

ay-1

0Ju

l-10

Sep

-10

Nov

-10

Jan-

11M

ar-1

1M

ay-1

1Ju

l-11

Sep

-11

Nov

-11

Jan-

12M

ar-1

2M

ay-1

2Ju

l-12

Sep

-12

Nov

-12

Jan-

13M

ar-1

3M

ay-1

3Ju

l-13

Sep

-13

Nov

-13

Jan-

14M

ar-1

4M

ay-1

4Ju

l-14

Sep

-14

Nov

-14

USD

/lb

PET PP PS

Source: IHS 02/14 North America C-M prices

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The shale gas boom means energy companies in the United States are boosting their capacity to turn cheap gas into ethylene, a basic hydrocarbon used to make solvents, plastics and detergents….

More complex hydrocarbons derived from crude oil, however, are becoming more expensive and their supply more volatile, adding urgency to a drive by specialty chemical companies to make everyday materials such as synthetic rubber, insulation foam and diaper absorbents from plant matter….

But more than half of what naphtha crackers churn out is ethylene. When the product is made more cheaply elsewhere, cracking naphtha becomes a less profitable business….

.

This environment is likely also to be supportive of renewable chemistry economics," they added.”

Ludwig Burger, Reuters, FRANKFURT | Fri Dec 7, 2012

“Cheap shale gas gives impetus to bioplastics growthMakers of chemicals and plastics from plant matter are emerging as unlikely

beneficiaries of the abundance of U.S. shale gas, which is shaking up the global petrochemical industry.

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Clarifying Sugar to Polymer Yields

Polymer Technology Overall Process Yield

Kg sugar for 1 kg polymer

Bio PLA (Ingeo) Sugar to PLA via lacticacid and lactides

80% 1.25

Bio PP Sugar to ethanol to propylene to PP

47% 2.14

Bio PET Bio MEG + Bio PTA from sugar

36% 2.77

Bio PE Sugar to ethanol to ethylene to PE

31% 3.22

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$0

$50

$100

$150

$200

$250

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60

Cost of O

il ($/bbl)

Cost of sugar (c/lb)

PET/PS/Ingeo Feedstock Cost Comparison

Above lines, Ingeo wins

Below lines, PET/PS wins

PET

PS

MaterialIndifference Curve

PET Analysis from McKinsey margin models, CMAI, February 2006

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$0

$50

$100

$150

$200

$250

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60

Cost of O

il ($/bbl)

Cost of sugar (c/lb)

PET/PS/Ingeo Feedstock Cost Comparison

Above lines, Ingeo wins

Below lines, PS wins

PS

PET Analysis from McKinsey margin models, CMAI, February 2006

For Example• When sugar cost ~$.17/lb, the cost

of feedstock per lb of Ingeo is the same as the cost of feedstock per lb of PS when oil is ~$50/barrel

• OPEX and CAPEX are similar.• The rest is scale…

Cellulosic sugarsGen 3 sugars

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about properties & performance …

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Ingeo Technology Platforms

8-seriesFoam

7-seriesBlow Molding

6-seriesFibers/Non-woven

4-seriesFilm

3-seriesInjection Molding

2-seriesThermoforming

Lactide Monomer

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Food ServicewareNonwovens / Fibers Rigids FilmsDurables

Key Properties

Range of melting points/crystallinity levels

Tunable hydrolysis

Hydrophilic / moisture wicking

Inherent odor resistance

UV resistance

Low bonding temp

Key Properties

Stiffness

Gloss, transparency

Printability

Weight reduction (vs. PET)

Key Properties

Stiffness

Miscibility

Improved flow

Chemical resistance

Key Properties

Stiffness

Compostability

High versatility for injection, extrusion and coating processes

Key Properties

Stiffness

High gloss and transparency

Dead fold / twist retention

Grease, oil and aroma barriers

Chemical resistance

High throughput

Performance features depend on your application

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2012 Design Table – 15 Distinct Ingeo Grades

2500HP 1grade

3grades

2grades

3100HP6100D

3grades

3grades

1grade

3260HP6260D

2grades

Incr

easi

ng M

olec

ular

Wei

ght

Fiber and Injection Molding Grades

Extrusion Grades

Varying Lactic Acid co-monomer ratio

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2013 Expanded Design Table – 21 Ingeo Grades

1grade

1grade

3grades

2grades

2grades

3grades

3grades

1grade

2grades

2grades

1grade

Incr

easi

ng M

olec

ular

Wei

ght

Fiber and Injection Molding Grades

Extrusion Grades

Varying Lactic Acid co-monomer ratio

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Improved Stiffness for Heat Resistant Ingeo Parts

0

20

40

60

80

100

60 70 80 90 100 110 120

Mod

ulus

(M

pa)

Temperature, °C

Improved Stiffness with Crystalline Ingeofor Practical Temperature Range of Hot

Foods

~40% increasein stiffness

Incumbent

High Productivity

Grade

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With related reduction in the manufacturing time required to produce the heat resistance part …

Existing Ingeo Grades

Temperature

New High Productivity Ingeo Grades:~ 70% shorter cycle times

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about applications & markets …

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Properties

• Broad and adjustable physical property set

Price

Sugars vs oil

Favorable yields,

Economies of scale

Feedstock hedging capabilities

Cradle to cradle economics

Preferences

Lower carbon footprint and energy usage

Renewable feedstock

Health Concerns BPA free Phthalates free Acrylonitrile free

Why we’re all here

“The 3 P’s”

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• Carbon savings• 75% reduction in CO2 emissions• Equivalent to 1,320 MT CO2/year savings

• Ingeo out performs polystyrene• Stronger/less breakage• Better lid adherence• Lower temperature filling (less energy use)• Maintained line speed and shelf life

• Addresses consumer concerns• Well received by key opinion leaders• Reduction in human toxicity• Did NOT increase our retail price

Danone’s Stonyfield - in their own words:

“IMPACT OF INGEO CONVERSION”

Stonyfield CEO Gary_Hirschberg, Innovation Takes Root Conference Keynote:“Inventing a WIN-WIN-WIN-WIN-WIN FUTURE”, February 21, 2012

Environmental

Performance

Consumer& Cost

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In nonwovens, broadening spunbond applications

Poland

Russia

3M

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In Food Service, Ingeo enables “zero waste”“organic waste diversion”

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And what about colleges, high schools, airports, hospitals, ….

And if it works in the US, what about the rest of the world?

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Shrink Films

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about applications & markets …“next big thing”

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0

20

40

60

High impactPMMA

ImpactPMMA

10%PLA

ImpactPMMA

20%PLA

ImpactPMMA

40%PLA

ImpactPMMA

60%PLA

PETG PC

Impa

ct s

treng

th (J

)-

Acrylic

--------------- Acrylic / Ingeo Alloys ----------- PETGPC

Improving Plexiglas PMMA Impact Performance with Ingeo

Source: Altuglas International a subsidiary of Arkema International

Impact performance comparable to PETG and PC

December 11, 2012 –

Altuglas International and NatureWorks Launch Worldwide

Marketing Collaboration For New High Performance Alloys Incorporating

Ingeo Biopolymers

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3D Printing

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Bead Foam Technology

Leadership in Energy & Environmental Design, is transforming the way we think about how our buildings and

communities are designed, constructed, maintained and operated across the

globe

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Ingeo Sunshades

www.revolution-fabrics.com/index_en.html

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9.0(T) x75(W) × 900(L)

Water ResistantPlywood

Ingeo Laminate

Structure

Application

Yellow Soil Adhesive

Dent, scratch resistibleNo color change by environmental

Eco-friendly

-. Residential

LG Hausys, zea® Flooring, “Prestige” line

Ingeo in Building & Construction

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Performance Laminates Integrating Direct Digital Imaging

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Unique surfactant performance with Ingeo lactide Intermediates

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6 X

What we’ve achieved in our time together 2005 – 2013

Our collective Footprint in the market

aggregate volume in the market

as of 2013

1 Billion lbMilestone

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What we’ve achieved in our time together

6 X

2005 – 2013 Our collective Footprint in the market

aggregate volume in the market

as of 2013

1 Billion lbMilestoneTechnology & Intellectual Property

Established

Startup & Market

Seeding

Operations Established

Today

1990-2001 2002-2005 2006-2013 2014 - forward

4k -8k mt pilot plant

2002 -140k mt facility @ Blair.2003 -largest lactic acid plant

Expanding customer & product base.Plant 2

2006 - 24/7 Blair operations at Blair 2013 – 150k ton expansion

Poised for Strong Growth

Where we are in the bigger picture

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3Dom Filaments Limited3MAGC America, Inc.AgRecycle, Inc.A-Line TextilesAMETEK Westchester PlasticsAndersen CorporationAPIArkema Inc.Asean CorporationAspen Research CorporationBASF SEBI-AX International Inc.BioAmberbioplastics MAGAZINEBiopolymer Network LtdBiovation II, LLCBonset AmericaBP Consulting, Inc.Bright BeatBritish American TobaccoCalysta EnergyCardno ChemRiskCargillCedap MexicoCenter for Sustainable Polymers, Univ of MNChemol Company, Inc.Chien Fua Bio-Tech Industry Co., Ltd.Clariant CorporationClear Lam Packaging, Inc.Corbion PuracCortec CorporationCredit SuisseDaihachi Chemical Industry Co., Ltd.Dai-ichi Kogyo Seiyaku Co., Ltd.Dandelion Research LimitedDaniMer Scientific, LLCDanoneDICAM University BolognaDuPontEarth Renewable TechnologiesEconCore NVEco-ProductsElevance Renewable SciencesEngel Machinery IncEP Resources Pte LtdEsprix TechnologiesEstilo PackEuropean BioplasticsFabri-Kal CorporationFar Eastern New Century Corp.Fargo 3D Printing

Fiber Innovation TechnologyFirst in Colours, IncorporatedFloreon Transforming Packaging LimitedGala IndustriesGeoEssence Solutions Ltd.Goodwin Procter LLPGoulston Technologies, Inc.Great Plains InstituteGreenBlueGreenDrop RecyclingGreener Polymers, Inc.GSI Exim America, Inc.Hangzhou Seemore New Material TechonologyHefei Hengxin Environmental Science & Technology Co.,LtdHenkelHighland CorporationHirshberg StrategicHubei Guanghe Biotech Co., Ltd.Huhtamaki FilmsHuhtamaki, Inc.ICO Polymer Specialty PowdersIndorama Ventures / Auriga PolymersInnovia Films IncInPro CorporationInterfacial SolutionsISCC Systems GmbHITENEJACCJamplast, Inc.JL Enterprises LtdJSPKaneka North America, LLC.Kao CorporationKao Specialties Americas LLCKimberly-Clark CorpKing Yuan Fu PackingKitamura Chemicals Co.,Ltd.KodakKuraray America, IncLanka Textile (PVT) LtdLaurel BioComposite, LLCLEGO System A/SLeistritz ExtrusionLG HausysLindeMagical Film Enterprise Co.,Ltd.MakerbotMcGill UniversityMetabolixMichigan State University

Minaplast LtdaMitr Phol GroupMitsubishi Plastics Inc.Mitsui Bussan Logistics Inc.MuCell Extrusion LLCNatur-TecNingbo Home-link Plastic Product Mfg. Ltd.Ningbo Institute of Materials Technology and Engineering Chinese Academy of SciencesNissan Chemical IndustriesNorthern Technologies Intl. Corp.Nypro IncThe Ohio State UniversityOnsemiro Inc.Parkinson Technologies IncPepsiCoPinova, Inc.Pittsburgh PiratesPlastic SuppliersPlastics NewsPlastics Technology MagazinePlastics Today, The Molding BlogPlastilite CorporationPlaxicaPolymaterials AGPolyOnePolyvel, Inc.PreservePresident Packaging Ind. Corp.Procter & GamblePromaPlastProvironPTT Global ChemicalPTT MCC Biochem Company LimitedPTT Polymer MarketingPTT Public Company LimitedPulcra Chemicalre:chemRhein Chemie Rheinau GmbHRisupack CorporationRMAXRwth Aachen UniversitySamsung Advanced Institute of TechnologySamsung Fine Chemicals Co., Ltd.SchlumbergerSealed Air Corp.Seattle MarinersSeattle Public UtilitiesSeaWorld Parks & Entertainment, Inc.Shanghai B-R-S Biotechnical Co.,Ltd.Shanghai Natural Shield New Material Technology Co.Ltd.

Shenzhen Esun Industrial Co.,LtdSmart Lanka GarmentSmithersSolegear Bioplastics, Inc.Srithai Superware Public Company LimitedStratasysStrategic Partners GroupSuiker UnieSukano Polymers USASulzer ChemtechSustainable NonwovensSynbra Technology bvTaghleef Industries S.P.A.Takemoto Oil & Fat Co., Ltd.Tecnologia del PlasticoTeijin Holdings USA, Inc.Teknor Apex CompanyThe Chemical Daily Co., Ltd.The Coca-Cola CompanyThe Dannon CompanyThe Nonwovens InstituteTop Leaf Chemical Korea Co. Ltd.Toray Advanced Materials Korea Inc.Toray Industries (America), Inc.Total Petrochemicals & Refining SATOTAL Refining and ChemicalsToyobo Co.,LtdTrevira GmbHU.S. PacificUhde Inventa-Fischer GmbHUnic Technology CorpUnileverUnitika Ltd.Universal Dynamics, Inc.University of Colorado, BoulderUniversity of Massachusetts LowellUS Green Building CouncilVictory PackagingVistaTekWacker ChemicalWacker Chemie AGWageningen UR - Food & BiobasedResearchWellman Int LtdWNA, Inc.World CentricWorld Textile Information NetworkZhejiang Hisun Biomaterials Co., Ltd.

- Thank you for joining us -

naturally advancing

with your help

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Marc Verbruggen

NatureWorks LLCwww.natureworksllc.com

Questions … ?

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