Industrial Use of Canola Oil Opportunities and Challenges

1
Industrial Use of Canola OilOpportunities and
Challenges

• Bill McNeill
• The Dow Chemical Company
• March, 2007

2
About Dow

• A science and technology leader with annual sales
  of 49 billion
• Founded in 1897 by Herbert H. Dow in Midland,
  Michigan
• Supplies more than 3,300 products to customers in
  175 countries
• From 156 manufacturing sites in 37 countries
• Employs 43,000 people globally

3
(No Transcript)
4
Serving Many Markets with Essential Solutions
Electronics/ Entertainment 3
Food/Food Packaging 22
Building Maint/ Construction 11
Home Care/ Improvement 10
Miscellaneous 1
Hydrocarbons Energy 12
Automotive/ Transportation 9
Water Purification 2
Paper/ Publishing 7
Health 3
Furniture/Furnishings 4
Personal/ Household Care 16
5
Strategic Themes
Set the Standard for Sustainability
Drive Financial Discipline and Low Cost to Serve
Invest for Strategic Growth
Build a People Centric Performance Culture
6
Trends Driving Renewable Feedstocks
Changing The Game

• High Cost and Volatile Hydrocarbon Feedstocks

• Energy and Raw Material Security

• Climate Change Increasing Cost of Carbon
  Emissions

• Sustainability LOHAS Consumer Segment

7
(No Transcript)
8
Soy Polyols
Soy Oil FAME
Glycerine (by product)

Polyurethanes
9
Better Performance

• Better Moisture Resistance

Alternate Polyol
Soy Polyol
Enhanced Whiteness
Control Foam
Soy Foam
Exposed
Exposed
Covered
Covered
10
Glycerine to Epichlorohydrin
Seed Oil FAME
Glycerine (by product)

11
Renewable Project Risks to Manage

• Raw Material Supply

Conversion Technology
Market Acceptance
12
Renewable Feedstock Options
Sugar Starch
Fats Oils
Biomass

• Refined global commodity
• 150 MMT
• 12-25 /lb

• Refined global commodity
• 150 MMT
• 15-40 /lb

• Crude Product
• Developing supply chain
• 100 Giga T

13
Conversion Technologies
Renewable Feedstocks
Gasification
Chemical Processes
Fermentation
Syngas
Polyols Epichlorohydrin Propylene
Glycol Surfactants Lubricants
Ethanol
Chemicals
Alcohols
Polymers
Ethylene
14
Market Acceptance
Increasing Risk and Difficulty
15
Critical Issues

• Business Strategy
• Feedstock Availability/Cost
• Various Feedstock Cost Scenarios
• Drop in Replacement vs. New Product
• Process Development Required
• Platform vs. Single Molecule
• Freedom to Practice Technology
• Sustainable Differentiation

16
Chemicals from Renewable Feedstocks

• Advantages
• Potential Low Cost
• Feedstock Diversification
• Potential for Better Performance
• Reduced Environmental Impact
• Expanded Business Models
• Growing Consumer Demand

• Challenges
• Complex Supply Chain
• Distributed Business Model
• Established Petrochemical Products
• New Conversion Technologies
• Coal
• Cost, Cost, Cost

17
Changing the Game
It Will Take Time -
8th annual Bioplastics Conference, 6-7 Dec 2006,
Frankfurt by 2010 --- 0.9-1.6 of petroleum
based plastics will be replaced with bioplastics,
by 2020 --- the percentage could be
1.25-2.5. 2005 2008 --- global capacity for
bioplastic increases from 360,000 to 600,000 t/yr

• 150 MM Lbs PLA expansion vs. 19 Billion Lbs PE
  new capacity
• 20 MM Lbs Soy Polyols vs. 12 Billion lbs of PO
  produced per year
• 150,000 MT Glycerin-Based EPI Vs. 1,400,000 MT
  capacity

18
Changing the Game

• Now
• First generation biofuels
• PDO
• PLA polymers
• 1 5 years
• By-product glycerin to chemicals
• Seed oil-based Polyols
• Ethanol to olefins
• PHA, PHB polymers
• Butanol, Succinic Acid from sugar
• 5 -10 Years
• Second Generation Biofuels
• Bio-refineries, industrial chemicals
• Bio Engineered crops for chemicals

19
Thank you! Questions.