Five minutes at Sepawa with …
H&PC: How is 2017 going and how do you see the next year?
Scott Tuchinsky: 2017 is going very well, with the business up in most of our sectors. Customers are requiring high performance in their formulations and that is where we focus. We also see a strong trend towards sustainability and environmentally friendly products. As it stands today, about 70% of our feedstocks are from natural and renewable resources, so we are ahead of the game in that respect. We are coming to a next phase now. By the end of this year we are going to be making ethylene oxide out of bio-based ethanol instead of natural gas. This opens the doors to bio-based ethoxylate products for home care. Customers will see that we can bring high performance products with a sustainable backbone, and even increasing that trend with the coming year.
H&PC: Which markets are more demanding sustainability?
ST: Every region is interested first and foremost in performance, of course. Even the most sustainable product has to deliver performance, or no one is going to pay for it. We see the market is most evolved in the west, but I see the trend is growing in South America or Asia.
H&PC: What about the United States?
ST: I think environmental awareness is growing there. There is a segment of the US population that we call “dark green”, that are going out of their way to ensure the home care products can be used with less water and lower temperatures. However this segment is small, no more than 5%, even if it is growing especially among millennials of whom are having more and more influence. That segment is dragging some of the bigger players into it. Unilever just acquired Seventh Generation (a manufacturer of green home care products based in USA), that is going to be a platform to grow that business in a bigger scale, transforming this segment into a greater opportunity.
Then you have got a much larger part of the population who will do it if they don’t have to sacrifice anything. That is an area where we see a large opportunity, especially with the plant of eco-ethylene oxide we are building. Usually you get performance issues when you move away from non-ionic surfactants. If you are buying a highly sustainable cleaning product and you do not want ethylene oxide or ethoxylated non-ionic you are going to sacrifice some performance. Therefore, being able to produce a 100% bio-based ethylene oxide the consumer can get the performance they need and the sustainability.
H&PC: Is the regulatory landscape changing in US, under the new administration?
ST: Much of the population in USA does not agree with the current deregulation. Under the Trump administration, the EPA (Environmental Protection Agency) is working to reduce many regulations under the Paris Accords but the individual states are very far down this path and will continue to act on their own. As a result, the federal mandates will have much of an less impact than people think.
H&PC: Do you employ green chemistry in manufacturing?
ST: We try to use sustainable processes across all manufacturing. For example in our Delaware, USA site, one of our largest surfactant plants, we use landfill gas to power up to 80% of our energy needs. At our facility in Hull, UK we have a wind turbine, that gives a lot of energy to the plant.
H&PC: Speaking of Hull (UK), I see you are expanding there. Aren’t you impacted by Brexit?
ST: Right now we are not feeling it, we are performing very well since then. Right now our business is really strong across all the regions. We actually see some benefit from the change with the dollar on the back of Brexit. It is hard to know what kind of influence it will have but since we are pretty much spread around the world, not only in UK or Europe – 4,200 employees globally – it will hopefully not have a huge impact on our operations.
H&PC: What new products is Croda launching now?
ST: The bio-based ethylene oxide we talked about is by far the biggest. There was a 175 million dollar investment to be able to build the plant in New Castle, Delaware. Plus, we have got the Zinador 22L, which is a bio-based odour neutraliser. It works by creating zinc complexes to capture smelly compounds such as hydrogen sulfide, mercaptans, thioethers, isovaleric acid and ammonia, without foaming or needing additional surfactants. It has been tested on food odours, cat urine, and body odour. We also have, as a result of our new bio-EO plant, some new products that will be 100% bio-based and will be launched next year which we are really excited about