New Value-Added Products from Soybeans

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New Value-Added Products from Soybeans

• Opportunities for
• North American Soybeans

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The stone age did not end because we ran out of
stones. -Unknown
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1996 Anything you can make out of petroleum, you
can make out of soybeans
except money
2006 Well maybe
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World Soy Production 1990100.5 Million Metric
Tons
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World Soy Production 2005 217 Million Metric Tons
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North American Production Utilization

• 2005 Marketing Year
• Whole Soybean production 3.5 Billion Bushels
• Soybean crush 2 billion bushels
• Soybean Exports 0.9 billion bushels
• Carryover and other 0.6 billion bushels

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What is in a Soybean?
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North American Soy Crushing

• NA crushes 1.8-2 billion bushels or 54-60 million
  tons
• 20-22 billion lbs of oil or about 2.8 billion
  gallons (10.6 billion liters.)
• 43-48 million tons of soybean meal.

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What About Value

• Old value ratios (typical)
• If whole beans were worth X, then oil was worth
  2.0-2.2 X and meal is worth 0.9-1.0X. Example if
  beans are worth 6/bu (0.10/lb) then oil is
  worth 0.22/lb and meal is worth 180/ton
  (0.09/lb)
• Oil value 2.42 (35)
• Meal value 4.41 (65)
• Return to crusher 6.83/bu
• Meal set demand, but oil made the margin.

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What About Value

• Recent value ratios (Summer 2006)
• If whole beans are worth X, then oil is worth
  2.6-2.8 X and meal is worth 0.8 X. Example if
  beans are worth 5.40/bu (0.09/lb) then oil is
  worth 0.26/lb and meal is worth 150/ton
  (0.075/lb)
• Oil value 2.86 (44)
• Meal value 3.68 (56)
• Return to crusher 6.54/bu
• Oil is now determining value and driving demand

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NA Soybean Oil Consumption
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Soybean Oil Demand Drivers

• Food demand flat to down, due to lost share
  (corn, canola), transfatty acid issue.
• Feed use is incidental, up slightly with
  increased crush.
• Industrial use is small compared to food use, but
  increasing rapidly due to biodiesel, plastics and
  other industrial uses.

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Soybean Meal Consumption
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Soybean Meal Demand Drivers

• Food demand is increasing significantly due to
  soy dairy substitutes and concentrated proteins,
  still relatively small compared to feed.
• Feed use is flat with increased crush.
• Industrial use (coatings, adhesives) is
  increasing but remains very small percentage of
  total.

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New Industrial Uses

• Biodiesel
• Plastics
• Lubricants
• Paints, Coatings Inks
• Solvents
• Adhesives

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Price Changes 1990 thru 200512/1/05- Soy Oil
21/lb. Crude 58.42/barrel Gas
13.03/MMBTU6/16/06- Soy Oil 24.9/lb. Crude
70.20/barrel Gas 7.46/MMBTU
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Biodiesel

• Tax incentives and mandates in the US should
  drive biodiesel production to 240 million gallons
  (912 million liters) in 2006
• Up 320 from 2005
• Equal to almost 9 of NA soybean oil production.

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Biodiesel EconomicsPer gallon

• Feedstock cost _at_0.27/lb 2.025
• Other production 0.400
• Plant gate 2.425
• Less federal incentives -1.100
• Before freight 1.325
• Local spot petrodiesel 2.055
• Gross margin 0.730
• Energy Management Institute 5/17/06 Memphis TN

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PLASTICS/PLASTIC COMPOSITES

• Market segments
• Current
• Polyols for Polyurethane foams, films, molded
  parts
• Plastic Composites
• Emerging
• Thermoplastics

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North American Polyurethane Demand (millions
lbs.)

• 2000A 2002 2004
• PUR 6482 6393 6888
• Polyol 3007 2956 3610

2004 API End Use Survey
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Polyols Intermediate Prices 2001 December,
2005 Cents per Pound
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Soy Polyols

• At least five different chemical modification
  approaches
• Range of costs and uses
• Molded foam
• Slab foam
• Carpet backing
• RIM and SMC parts

UTT Carpet Mill- Dalton GA
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Flexible Foam Seating
Cargill supplying Woodbridge in Ontario for use
by Ford
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Target AreaPLASTIC COMPOSITES

• Soy-based thermoset resin
• Polyester resin with fiberglass filler
• Use by Ag Equipment manufacturers
• Testing by auto makers
• Polyurethanes
• Testing pultrusion of parts
• Testing molding techniques and different fillers

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Polyester Intermediate Prices 2001 December,
2005 Cents per Pound
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LubricantsSoy Oil versus Petroleum Basestocks

• Soy Oil Advantages
• Better lubricity
• Lower volatility
• Better viscosity index
• Soy Oil Disadvantages
• Poor oxidative stability
• Poor low temperature properties

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Lubricant Basestock Prices 2001 thru October,
2005 Cents per Pound
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LUBRICANTS HYDRAULIC FLUIDS

• Current
• Total loss applications
• 2-cycle engine oil
• Some hydraulic fluids
• Transformer fluids
• Metal working
• Mold release and other industrial

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LUBRICANTS HYDRAULIC FLUIDS

• Researching
• Crankcase oil development at Valvoline
• Hydraulic fluid formulation at Afton (Ethyl
  Corporation)

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Paints, Coatings Inks

• Traditionally largest industrial market for
  soybean oil.
• Alkyd resins declining with decline of oil based
  paint.
• Soy ink growing as price is
  more competitive.

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Paints, Coatings Inks

• Research
• Water based (latex) paints
• Powder coatings
• UV cured inks.

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Latex Coatings Intermediate Prices 2001
December, 2005 Cents per Pound
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Powder Coatings Intermediate Prices 2001
December, 2005 Cents per Pound
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Solvents

• Primarily Soy methyl esters
• Same as biodiesel with slightly different
  standard.
• New compounds in development.

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Solvent Prices 2001 thru October, 2005 Cents
per Pound
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SOLVENT MARKET APPLICATIONS

• COMMERCIAL
• Parts cleaners degreasers
• Hard surface cleaners
• Stainless steel equipment cleaners (Restaurants)
• Printing ink cleaners
• Paint strippers
• Adhesives removers
• Mastic removers
• Graffiti removers
• Asphalt cleaners release agents
• Concrete wood stains

• Hand cleaners
• Hand lotions
• Oil spill remediation
• Corrosion protectants
• Oil field equipment cleaners
• Plant floor cleaners

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APPLICATIONS IN DEVELOPMENT

• SME
• Plastic waste disposal reuse
• Highway paving patching materials
• Pesticide carriers (mosquito larvicides)
• Mold mildewcides
• Paper pulp recycling
• Alkyd coating carriers
• Stationary engine fuels (hydrogen)

• Soy Oil
• Bioremediation (soil groundwater)
• Metalworking fluids
• Emollients (personal care products)

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ADHESIVES

• Primary market Wood Adhesives
• Based on soy flour or protein concentrates
• Recently launched new use in
  interior grade plywood
• Limited packaging adhesives based on soybean oil.

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Adhesives Intermediate Prices 2001 December,
2005 Cents per Pound
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ADHESIVES

• Research
• Improve water resistance to allow exterior
  plywood use
• Lower viscosity to allow use in oriented
  strandboard

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Fermentation Research

• Produce ethanol from carbohydrates in soybean
  meal
• Real goal is a lower cost protein concentrate
• 70 protein
• No indigestible sugars/anti-nutritionals
• Improved storage properties.

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Thank You

• Any Questions?
• www.omnitechintl.com