Tom Branna, Editorial Director03.04.15
To “jumbo shrimp,” “civil war” and “working from home,” add “cautiously optimistic,” an oxymoron that’s part of every business executive’s vocabulary these days. Certainly there’s good reason for caution: raw material prices remain volatile; consumer sentiment remains fickle; terrorism appears to be ramping up; established markets are stagnant and emerging markets have, in some cases, stopped emerging. The global economy is marred by variables—and that’s just the problems that make headlines and get transferred to spreadsheets and revenue projections. As former US Secretary of Defense Donald Rumsfeld once so famously suggested, “…there are also unknown unknowns. We don’t know what we don’t know.”
But forward-thinking suppliers who sat down with Happi during the American Cleaning Institute’s annual meeting (see p. 82) are quite confident that they have systems in place and products in pipelines to handle nearly every issue that can pop up in the global marketplace.
“Right now, raw materials are seeing a lot of foreign exchange effects,” observed Jeff Rogers, VP-home care, agriculture and nutrition, Ashland Specialty Ingredients. “We are optimistic that we will see a bit more stability in raw material prices.”
At press time, crude oil was trading around $51 a barrel after falling to $40 earlier in the year. And yet, as recently as mid-2014, oil was commanding a $100 price. For the same period, Malaysian palm kernel oil prices have climbed to $1,023 for a metric ton, compared to $904 in September, while a year ago, PKO was trading at $1381.
“Customers want to manage cost and quality. We can help them do that,” added Rogers.
Finding Growth
For instance, many observers noted that while emerging markets may have fallen out of favor in recent months, generally speaking, growing populations demand more sophisticated products, especially in India and other Southeast Asian countries. Here, for example, Wacker has posted double-digit gains.
“Wacker is a well-positioned silicone player in emerging markets,” asserted Dr. Christoph Kowitz, VP-performance chemicals, Wacker Silicones. “We have technical centers in Brazil, India and China, as well as in Singapore and Korea. We’ve been there for decades.”
More specifically, Wacker has operated a key joint venture in India for more than 15 years with very strong growth. The company has a technical center and manufacturing facilities near Kolkata, West Bengal, India.
Although 80% of Oxiteno’s sales are derived from Mercosur countries, the surfactant company, which specializes in sulfation and ethoxylation, is focused on expanding around the world, adding a US office in 2007 and one in Shanghai in 2011. The US office is headed by Carl Cappabianca, sales manager, Eastern Region, home and personal care, Oxiteno USA.
“Our key message to the US is this, ‘We are a beginner. We will promise less and deliver more,’” explained Leandro Soncini Rodriguez, head of global marketing and business development, home and personal care.
Although Oxiteno is still new to the region, Rodriguez notes that the company is a serious surfactant player.
“We have a lot of experience in ethoxylation, where we are the No. 2 player in the world and well-positioned in the Americas, Brazil and Mexico. We are a one-stop shop for ethoxylates.”
Evonik, too, is expanding in the Americas. Last fall, the company started operations at a new plant to produce ingredients for customers in the cosmetic and consumer goods industries in São Paulo. Ultimately, it will produce up to 50,000 metric tons of ingredients and intermediates for global and regional customers a year. In 2013, the company opened a new production facility for organic specialty surfactants in the Shanghai Chemical Industry Park (SCIP) in Shanghai, China. Evonik operates a similar plant in Bekasi, Indonesia, mainly serving manufacturers in the personal and household care industries in Southeast Asia, Australia and New Zealand.
In contrast, Dow Chemical is determined to remain asset light in order to stay flexible, according to Cristi L. Stiers, global business director, home, institutional and personal care solutions, Dow Chemical. She explained that too often, chemical companies build facilities without taking the customer’s needs into consideration and ultimately spend time and money searching for ways to utilize new assets. A need for speed is part of a new business model that Dow Chemical introduced during the past year.
“We aren’t tied to one technology,” noted Ralf Brinkmann, business president, consumer care Dow Europe. “We trimmed and pruned and what we’ve kept will make a significant contribution to key performance metrics. We are faster and more flexible and are anticipating our customers’ needs.”
Those needs include better sensorial properties, convenience and concentration. According to Brinkmann, the consumer care business is cross-leveraging with Dow Chemical’s food and pharma business to uncover solutions such as cellulosics for improved sensory feel and controlled release for detergents.
“We have shorter cycles for innovation and achieve a higher success rate because now we can grab solutions from the entire Dow Chemical toolbox,” said Brinkmann.
Every supplier in the global household and personal care industry has a toolbox of their own and are focusing on what they do best. At Ashland, rheology is considered a core competency and the company is finding more opportunities to develop solutions for its customers throughout the home and personal care industry, noted Rogers.
“There are a lot of unmet consumer needs that are connected to delivery,” he explained. “
Natrosol hydroxyethylcellulose (HEC) is a nonionic, water-soluble, free-flowing granular powder. When incorporated into personal care products, formulas are dispensed rich and thick from the container, but spread easily on hair and skin, according to Ashland.
Few companies have more experience than BASF, the largest chemical company in the world, which just happens to be celebrating its 150th anniversary—and a broad portfolio of solutions to handle any problems that may come its customers’ way, according to industry executives.
“Water usage is a concern around the world,” noted Hans Reiners, president, BASF Care Chemicals. “(However), in the US, consumers rely on unit dose, while in emerging markets, it’s hand washing. So while the trends are the same, the solutions are different.”
Different solutions impact the synthetic vs. natural debate, as well. Not too many years ago, petroleum and vegetable feedstock pricing moved in lockstep with one another. That was then, this is now and with price volatility the norm these days, formulators and their suppliers are keeping their options open when it comes raw material sourcing from oleo (or more broadly, biomass) and petrol feedstocks.
“At the end of the day, you need both,” observed Frank Freiler, VP-global key account management, Care Chemicals NA, BASF. “But besides talking about natural or synthetic materials, companies have to ask themselves, ‘Are we supporting the local population?’ We have several examples of supporting indigenous people.”
One example is the Argan Program that is celebrating 10 years of collaboration with women’s cooperatives in Morocco and helps to supply the beauty industry with Argan-based oil used in cosmetics and personal care products. BASF has programs like this in various parts of the world including South America and Asia that benefit the local communities.
Traditional chemistry, too, can play a critical role in sustainability efforts. Wacker executives note that in many emerging markets, clothes are usually hand-washed and rinsed in buckets. Adding silicones to cleaning compositions reduces foam in the rinse step and therefore, the need for many buckets of rinse water.
Where and how a company sources ingredients is critical as well. In fact, Dirk Buengel, senior VP-care chemicals NA, BASF, insisted that sustainable palm oil production remains the big draw in personal care markets and he proudly notes that BASF was the first chemical company to join the Roundtable for Sustainable Palm Oil (RSPO).
Novel Technology
As companies reduce their footprints, and improve the lives of consumers and their employees, they’re also focused on rolling out new technologies that can boost the top and bottom line, improve finished product performance and help the environment, too.
Evonik Industries, for instance, is commercializing sophorolipid biosurfactants for formulating eco-friendly household cleaning products. They have a low toxicological profile and provide unique properties in cleaning applications. Sophorolipids are produced by a pure biotechnological fermentation process.
“We can adjust them to foam or not foam,” explained Dana Nystrand, assistant marketing manager, household care/CS NA.
Specifically, Evonik’s Rewoferm SL 446 sophorolipid is tailored in its acid-to-lactone ratio, resulting in significantly superior performance compared to other materials on the market. Evonik sophorolipids offer significant advantages in foaming, degreasing and water hardness tolerance over established surfactants and are ideal for applications such as hand dish wash and hard surface cleaning.
“Large-scale production is crucial to successful commercialization of biosurfactants in the household cleaning market,” explained Steven Snead-Smith, business director, household care, for Evonik Corporation in the NAFTA region. “We already offer a portfolio of fermentation-based ingredients through our global health and nutrition business, so this is a natural progression for us.”
This year, Wacker is introducing new technologies for laundry formulas that are designed to impart interesting characteristics to fabrics. One of these is Wacker HC 321 for laundry adjuncts. It is a new silicone-impregnating agent that provides repellency benefits.
“Silicones bring softness and other benefits to fabric,” explained Dr. Karla Wilzer, marketing manager, performance chemicals, Wacker Silicones. “They can make the fabric more absorbent, softer, and easier to iron. And some water-based silicones even provide soil repellency.”
With the acquisition of Verenium in 2013, coupled with the purchase of Henkel’s detergent enzymes technology and its existing business, BASF is poised to launch a new range of enzyme solutions in 2016, according Buengel, who said the move will enable BASF to provide nearly every ingredient in a formulation project.
For now, however, BASF is gearing up for the startup of a Trilon M (methylglycinediacetic acid) world scale plant at Evonik’s Theodore, AL site. The company is investing approximately $90 million in the plant that is expected to start in second half of 2015. The biodegradable chelant provides a boost to cleaning efficacy in detergents and home care formulas. Demand for Trilon M is expected to rise with the European phosphate ban that is expected to take effect in 2017.
And while BASF’s Sokalan polymers aren’t new, company executives say demand will grow due to their importance in unit dose and liquid detergent formulations. Sokalan HP polymers, for example, serve as dye transfer inhibitors. But unlike cellulosic anti-redeposition agents such as carboxymethyl cellulose (CMC) and hydroxypropylmethyl cellulose, Sokalan HP grades perform very well in the presence of colored soil.
What’s Ahead?
Of course, the category that a company competes in can play an important role in success.
“Due to their versatility, silicones have found their place in household care and laundry applications,” observed Dr. Christian Hartel, president, Wacker Silicones. “They play a critical role to laundry care formulations and hard surface cleaners, too.”
To that end, Wacker is working closely with its customer partners to co-develop products.
“This industry is beginning to open up,” observed Hartel. “The industry sees the benefit of speed-to-market, but there has to be trust.”
Oxiteno is in the midst of an aggressive expansion, with a state-of-the-art facility coming online in Mexico this month and plans to start up two reactors in Pasadena, CA in 2017.
“Fifty percent of our business comes through the US,” explained Rodriguez. “Yet, we are still a small, agile company. We can respond with sustainable, green, performance-based solutions.”
How a company operates can impact speed, as well. Evonik, for example, recently reorganized from six business units down to three. The result, explained Snead-Smith, is a more agile operation.
Large or small, every supplier to the home care market is determined to provide a range of solutions as quickly as possible to their customers.
But forward-thinking suppliers who sat down with Happi during the American Cleaning Institute’s annual meeting (see p. 82) are quite confident that they have systems in place and products in pipelines to handle nearly every issue that can pop up in the global marketplace.
“Right now, raw materials are seeing a lot of foreign exchange effects,” observed Jeff Rogers, VP-home care, agriculture and nutrition, Ashland Specialty Ingredients. “We are optimistic that we will see a bit more stability in raw material prices.”
At press time, crude oil was trading around $51 a barrel after falling to $40 earlier in the year. And yet, as recently as mid-2014, oil was commanding a $100 price. For the same period, Malaysian palm kernel oil prices have climbed to $1,023 for a metric ton, compared to $904 in September, while a year ago, PKO was trading at $1381.
“Customers want to manage cost and quality. We can help them do that,” added Rogers.
Finding Growth
For instance, many observers noted that while emerging markets may have fallen out of favor in recent months, generally speaking, growing populations demand more sophisticated products, especially in India and other Southeast Asian countries. Here, for example, Wacker has posted double-digit gains.
“Wacker is a well-positioned silicone player in emerging markets,” asserted Dr. Christoph Kowitz, VP-performance chemicals, Wacker Silicones. “We have technical centers in Brazil, India and China, as well as in Singapore and Korea. We’ve been there for decades.”
More specifically, Wacker has operated a key joint venture in India for more than 15 years with very strong growth. The company has a technical center and manufacturing facilities near Kolkata, West Bengal, India.
Although 80% of Oxiteno’s sales are derived from Mercosur countries, the surfactant company, which specializes in sulfation and ethoxylation, is focused on expanding around the world, adding a US office in 2007 and one in Shanghai in 2011. The US office is headed by Carl Cappabianca, sales manager, Eastern Region, home and personal care, Oxiteno USA.
“Our key message to the US is this, ‘We are a beginner. We will promise less and deliver more,’” explained Leandro Soncini Rodriguez, head of global marketing and business development, home and personal care.
Although Oxiteno is still new to the region, Rodriguez notes that the company is a serious surfactant player.
“We have a lot of experience in ethoxylation, where we are the No. 2 player in the world and well-positioned in the Americas, Brazil and Mexico. We are a one-stop shop for ethoxylates.”
Evonik, too, is expanding in the Americas. Last fall, the company started operations at a new plant to produce ingredients for customers in the cosmetic and consumer goods industries in São Paulo. Ultimately, it will produce up to 50,000 metric tons of ingredients and intermediates for global and regional customers a year. In 2013, the company opened a new production facility for organic specialty surfactants in the Shanghai Chemical Industry Park (SCIP) in Shanghai, China. Evonik operates a similar plant in Bekasi, Indonesia, mainly serving manufacturers in the personal and household care industries in Southeast Asia, Australia and New Zealand.
In contrast, Dow Chemical is determined to remain asset light in order to stay flexible, according to Cristi L. Stiers, global business director, home, institutional and personal care solutions, Dow Chemical. She explained that too often, chemical companies build facilities without taking the customer’s needs into consideration and ultimately spend time and money searching for ways to utilize new assets. A need for speed is part of a new business model that Dow Chemical introduced during the past year.
“We aren’t tied to one technology,” noted Ralf Brinkmann, business president, consumer care Dow Europe. “We trimmed and pruned and what we’ve kept will make a significant contribution to key performance metrics. We are faster and more flexible and are anticipating our customers’ needs.”
Those needs include better sensorial properties, convenience and concentration. According to Brinkmann, the consumer care business is cross-leveraging with Dow Chemical’s food and pharma business to uncover solutions such as cellulosics for improved sensory feel and controlled release for detergents.
“We have shorter cycles for innovation and achieve a higher success rate because now we can grab solutions from the entire Dow Chemical toolbox,” said Brinkmann.
Every supplier in the global household and personal care industry has a toolbox of their own and are focusing on what they do best. At Ashland, rheology is considered a core competency and the company is finding more opportunities to develop solutions for its customers throughout the home and personal care industry, noted Rogers.
“There are a lot of unmet consumer needs that are connected to delivery,” he explained. “
Natrosol hydroxyethylcellulose (HEC) is a nonionic, water-soluble, free-flowing granular powder. When incorporated into personal care products, formulas are dispensed rich and thick from the container, but spread easily on hair and skin, according to Ashland.
Few companies have more experience than BASF, the largest chemical company in the world, which just happens to be celebrating its 150th anniversary—and a broad portfolio of solutions to handle any problems that may come its customers’ way, according to industry executives.
“Water usage is a concern around the world,” noted Hans Reiners, president, BASF Care Chemicals. “(However), in the US, consumers rely on unit dose, while in emerging markets, it’s hand washing. So while the trends are the same, the solutions are different.”
Different solutions impact the synthetic vs. natural debate, as well. Not too many years ago, petroleum and vegetable feedstock pricing moved in lockstep with one another. That was then, this is now and with price volatility the norm these days, formulators and their suppliers are keeping their options open when it comes raw material sourcing from oleo (or more broadly, biomass) and petrol feedstocks.
“At the end of the day, you need both,” observed Frank Freiler, VP-global key account management, Care Chemicals NA, BASF. “But besides talking about natural or synthetic materials, companies have to ask themselves, ‘Are we supporting the local population?’ We have several examples of supporting indigenous people.”
One example is the Argan Program that is celebrating 10 years of collaboration with women’s cooperatives in Morocco and helps to supply the beauty industry with Argan-based oil used in cosmetics and personal care products. BASF has programs like this in various parts of the world including South America and Asia that benefit the local communities.
Traditional chemistry, too, can play a critical role in sustainability efforts. Wacker executives note that in many emerging markets, clothes are usually hand-washed and rinsed in buckets. Adding silicones to cleaning compositions reduces foam in the rinse step and therefore, the need for many buckets of rinse water.
Where and how a company sources ingredients is critical as well. In fact, Dirk Buengel, senior VP-care chemicals NA, BASF, insisted that sustainable palm oil production remains the big draw in personal care markets and he proudly notes that BASF was the first chemical company to join the Roundtable for Sustainable Palm Oil (RSPO).
Novel Technology
As companies reduce their footprints, and improve the lives of consumers and their employees, they’re also focused on rolling out new technologies that can boost the top and bottom line, improve finished product performance and help the environment, too.
Evonik Industries, for instance, is commercializing sophorolipid biosurfactants for formulating eco-friendly household cleaning products. They have a low toxicological profile and provide unique properties in cleaning applications. Sophorolipids are produced by a pure biotechnological fermentation process.
“We can adjust them to foam or not foam,” explained Dana Nystrand, assistant marketing manager, household care/CS NA.
Specifically, Evonik’s Rewoferm SL 446 sophorolipid is tailored in its acid-to-lactone ratio, resulting in significantly superior performance compared to other materials on the market. Evonik sophorolipids offer significant advantages in foaming, degreasing and water hardness tolerance over established surfactants and are ideal for applications such as hand dish wash and hard surface cleaning.
“Large-scale production is crucial to successful commercialization of biosurfactants in the household cleaning market,” explained Steven Snead-Smith, business director, household care, for Evonik Corporation in the NAFTA region. “We already offer a portfolio of fermentation-based ingredients through our global health and nutrition business, so this is a natural progression for us.”
This year, Wacker is introducing new technologies for laundry formulas that are designed to impart interesting characteristics to fabrics. One of these is Wacker HC 321 for laundry adjuncts. It is a new silicone-impregnating agent that provides repellency benefits.
“Silicones bring softness and other benefits to fabric,” explained Dr. Karla Wilzer, marketing manager, performance chemicals, Wacker Silicones. “They can make the fabric more absorbent, softer, and easier to iron. And some water-based silicones even provide soil repellency.”
With the acquisition of Verenium in 2013, coupled with the purchase of Henkel’s detergent enzymes technology and its existing business, BASF is poised to launch a new range of enzyme solutions in 2016, according Buengel, who said the move will enable BASF to provide nearly every ingredient in a formulation project.
For now, however, BASF is gearing up for the startup of a Trilon M (methylglycinediacetic acid) world scale plant at Evonik’s Theodore, AL site. The company is investing approximately $90 million in the plant that is expected to start in second half of 2015. The biodegradable chelant provides a boost to cleaning efficacy in detergents and home care formulas. Demand for Trilon M is expected to rise with the European phosphate ban that is expected to take effect in 2017.
And while BASF’s Sokalan polymers aren’t new, company executives say demand will grow due to their importance in unit dose and liquid detergent formulations. Sokalan HP polymers, for example, serve as dye transfer inhibitors. But unlike cellulosic anti-redeposition agents such as carboxymethyl cellulose (CMC) and hydroxypropylmethyl cellulose, Sokalan HP grades perform very well in the presence of colored soil.
What’s Ahead?
Of course, the category that a company competes in can play an important role in success.
“Due to their versatility, silicones have found their place in household care and laundry applications,” observed Dr. Christian Hartel, president, Wacker Silicones. “They play a critical role to laundry care formulations and hard surface cleaners, too.”
To that end, Wacker is working closely with its customer partners to co-develop products.
“This industry is beginning to open up,” observed Hartel. “The industry sees the benefit of speed-to-market, but there has to be trust.”
Oxiteno is in the midst of an aggressive expansion, with a state-of-the-art facility coming online in Mexico this month and plans to start up two reactors in Pasadena, CA in 2017.
“Fifty percent of our business comes through the US,” explained Rodriguez. “Yet, we are still a small, agile company. We can respond with sustainable, green, performance-based solutions.”
How a company operates can impact speed, as well. Evonik, for example, recently reorganized from six business units down to three. The result, explained Snead-Smith, is a more agile operation.
Large or small, every supplier to the home care market is determined to provide a range of solutions as quickly as possible to their customers.