DuPont Co. (DD) and Tate & Lyle Plc (TATE), allied in a venture to produce chemicals from corn glucose rather than oil, are considering a second biochemical plant, unperturbed by the shale and petrochemical boom in the U.S.
The leadership team, assisted by outside advisers, is preparing plans to increase output of bio-propanediol for products from carpets to cosmetics when the time is right, Todd Sutton, head of the venture, said in an interview at the In-Cosmetics trade fair in Hamburg, Germany.
“There’s certainly a frenzy on the petrochemical side but it hasn’t dented us,” said Sutton. “The biomaterials world is still heating up. Even if it’s delayed a couple of years the bottom line is we’re still going to run out of natural gas.”
The current increase in crude oil prices caused by the Ukraine crisis could generate additional interest in sustainably produced materials that are not derived from petrochemicals, Sutton said. The partnership, established in 2004, teamed DuPont’s heritage in polymers with Tate’s history of fermenting and processing industrial corn into animal feed, oil and starch for fizzy drinks.
Tate shares rose 1.6 percent to 656.5 pence at 10:22 a.m. in London, where the company is based.
Production of bio-based propanediol uses about 40 percent less energy than its petroleum-based counterpart, according to the joint venture.
A first $100 million biochemical plant in Loudon, Tennessee started commercial operations in 2006, siphoning off the dextrose it needs from Tate’s adjacent facility to minimize the cost of trucking-in raw materials.
One option is to expand the Loudon facility, another is an additional plant in a region such as southeast Asia, where the crops can be grown and the glucose fermented, Sutton said.
“We would like to have a plan in the next 12 months,” said Sutton. “You can do the work early, there’s no penalty for that.”
Most of the 100 million-pound-volume output from the existing site is taken by Wilmington, Delaware-based DuPont for materials including the Sorona brand used in carpets and wrinkle-free trousers. The introduction of new offerings and the search for external customers has taken the venture into markets from cosmetic ingredients and polyurethanes to aircraft de-icers and flavorings.
DuPont, which acquired enzyme maker Danisco A/S for about $7.1 billion in 2011, is moving away from the traditional chemicals and coatings that were the mainstay of the 212-year-old company.
BASF SE, the world’s biggest chemical company, has so far taken a more conservative approach to biochemicals, making incremental steps into renewable materials. Emeryville, California-based Amyris Inc. announced yesterday it will collaborate with BASF to explore biotechnology methods of manufacturing chemicals. Financial terms of the agreement weren’t disclosed. Amyris shares gained 4 percent in New York yesterday after the announcement.
DuPont and Tate view the joint their project like venture capitalists, Sutton said.
“There’s no honeymoon any more,” Sutton said. “We’ve got the business to a place that’s very solid. Some of this isn’t as sexy as it was in the beginning, now you’re looking for half a cent here and how can you squeeze more out of the energy that you’re consuming.”
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