Working with Downstream Processors and Brand Owners to Advance a New - PowerPoint PPT Presentation

Working with Downstream Processors and Brand Owners to Advance a New BioBased Materials Atul Thakrar January 28, 2013 1

Who is Segetis • Green & Rapidly Growing VC-funded Chemistry Company – Founded in late 2006 in Minnesota, USA on the notion of combining Levulinic Acid (LA) and Glycerol into ketals – Delivering new to the world materials, not green routes to existing molecules – Series C: Funded by SABIC/PNB/KV/MLSF/DSM in 2012 O O O O OH HO HO OH HO OH O NH 2 succinic acid 3-hydroxypropionic acid glutamic acid L-Ketals O HO O HO OH HO OH O OH O O NH 2 glycerol 4-hydroxybutyrolactone aspartic acid OR O O O O O O OH HO OH O HO HO OH O O itaconic acid levulinic acid 2,5-furandicacboxylic acid O OH OH OH OH OH OH OH OH HO OH OH OH O OH OH OH OH OH xylitol glucaric acid sorbitol Top 12 US DOE renewable chemicals 2

Segetis Platform  Robust Opportunity Pipeline Current Future Consumer: ~$1Bn Consumer: ~$23Bn • • Surfactants Household Cleaners • Superabsorbent Polymers • Personal Care/Bedding Levulinic Ketal Auto/Industrial: ~$2Bn Auto/Industrial: ~$25Bn Platform Materials • Solvents • Interior Foams • • Cleaners Coatings/Adhesives >1,000 • Plastics Compositions Plastics: ~$11Bn Construction/Plastic: ~$15Bn • Construction • Paints/Coatings • Toys • Insulation • Medical • Wire & Cable Water Treatment: ~$3Bn • Flocculants • Reverse Osmosis Membranes 3

Segetis Converts Renewable LA Feedstock to New, High-Value Chemicals Cellulosic Biomass From lab scale to commercial sales in 4 years Levulinic Acid (LA) O OR 1 O O R 2 Sugar Family of Products • Thermochemical • Renewable feedstocks • Materials that compete conversion uses known on performance, not just • Diverse feedstocks processes green • Markets open to change 4

Starting Checklist for Commercialization of New Chemicals  Does the new chemical do anything useful?  Who needs that benefit?  How does the performance compare to other alternatives? Buyer Ability to supply Practical Ability to sell Economics 5

Powerful and effective non-toxic solvents with low odor Broad Excellent grease-cutting and polymer Solvency solvency Non-VOC, non-flammable, CARB LVP-exempt Low, Efficient Tunable Stabilizes multi-component Coupling formulations Volatility Promotes wetting and cleaning 6

Method & Segetis Teamwork method - an innovative producer of home cleaning products on shelves across the US “This technology is a breakthrough that takes Method’s performance and sustainability to the next level,” said Adam Lowry, Method Co-Founder and Chief Greenskeeper. “We’re incredibly proud of this innovation because it solves one of the traditional problems in green cleaning — how do you clean effectively without dirty solvents? Instead of formulating around the problem as others must, Method delivers powerful solvency in our products through renewable alternatives .” 7

High Volume Plasticizers: Drive to Replace Phthalates Toxic Moms: 12 Scary Chemicals in  Women's Bodies Health concerns with phthalates …" plasticizer" compounds found in pregnant women's bodies ….Phthalates have been linked to liver cancer and reduced sperm counts. CBS News 1/21/11  Consumers are demanding change  Regulatory agencies have restricted use of phthalates US & Canada Japan  And the pressure is mounting Restricted use Restricted use European Union US on a path to a ban : “These [phthalate] assessments will Restricted use inform EPA’s decision …potential control measures may include a ban….” -US EPA, FDA, & CPSC joint program Former workhorse phthalates essentially banned EU taking steps to expand the phthalate ban 8

Georgia Gulf (Axiall Corporation) & Segetis Teamwork In Inpro’s Wall and Door Protection Products This is an exciting collaboration that combines Segetis' proprietary technology with Georgia Gulf’s vinyl compounding expertise to customize formulations that deliver unique performance profiles ,” said William H. Doherty, vice president – vinyl compounds at Georgia Gulf. 9

Starting Checklist for Commercialization of New Chemicals  Does the new chemical do anything useful?  Who needs that benefit?  How does the performance compare to other alternatives?  How do you make the chemical at large scale?  Supply chain Buyer Ability to supply Practical Ability to sell Economics 10

Building Production Experience & Capacity Segetis (Pilot Scale) - 2009 Demonstration Plant - 2012 0.25 Million lbs/yr 3+ Million lbs/yr Objectives: Objectives: 1. P rocess development 1. Demonstrate scale-up utilizing existing assets 2. Support market validation 2. Supply strategic customers Next Stage – Commercial Plant 11

Securing Cost-Effective Levulinic Acid Feedstock • Existing production in China uses corn cobs • Conversion from sugar being validated by Segetis • Process for wood conversion piloted Wide Range of Feedstock Options Corn Cobs Sugar Wood Municipal Waste   Feedstock Inefficient Needs development collection/handling   Large Scale Small Needs development  Validated conversion Underway Documented Concept technology 12

Starting Checklist for Commercialization of New Chemicals  Does the new chemical do anything useful?  Who needs that benefit?  How does the performance compare to other alternatives?  How do you make the chemical at large scale?  Supply chain Buyer Ability to supply  IP landscape Practical Ability to  Regulatory clearance sell Economics 13

Product Clearance: Registration & Toxicology Segetis solvents are US TSCA, listed with Canadian NDSL and REACH registered • No Segetis materials were modeled to be persistent, bioaccumulative or toxic • First round of toxicology shows Segetis’ products are – Non-toxic – Non-mutagenic – Not a skin sensitizer – Low ecological risk • Second round of toxicology testing underway 14

Segetis Materials Enhancing Sustainability Profile • In comparison to petro-based alternatives: 1. Save 2 gallons of gasoline per gallon of Segetis product 2. Save 7 tons of CO 2 -equivalents per ton of Segetis product 3 rd Party LCA modeled “field to product” by Boustead Consulting Ltd 15

Solid Patent Protection US patents allowed/ issued 7 US 8,053,468; US 8,026,378; US 8,084,635; US 8,178,701; US 8,188,030; US 8,318,814 non-US patents allowed/issued: 15 active PCT cases that will all be nationalized in the next 2 years: > 15 patent families in the portfolio : > 35 total active patents : > 200 16

Starting Checklist for Commercialization of New Chemicals  Does the new chemical do anything useful?  Who needs that benefit?  How does the performance compare to other alternatives?  How do you make the chemical at large scale?  Supply chain Buyer  Economies of scale to drive cost to produce Ability to  Competitive market dynamics supply  IP landscape Practical Ability to  Regulatory clearance sell Economics 17

Building from a Solid Foundation  Translated market engagement to commercial successes  Scaled products to commercial production facilities  Gained regulatory clearance for products  Created line of sight options for large-scale LA supply  Broad IP protection  New technologies in the pipeline Practical Economics in progress: Time to grow through improvements in scale 18

Key Lessons – New Materials Introduction • Focus development in areas that require wholesale change • Get early validation - choose strategic partner that can provide feedback and turn into a purchase order. • Appropriate balance in resources between technology and market development – Establish a customer pipeline to have big customers ready for economies of scale – Focus technology pipeline efforts on building IP, not commercialization, and be prepared to rapidly advance once the company gains momentum • Creative business models • Prepare to change/adjust rapidly …. but have focus! 19