Opportunities for Soy Polyols in the PU

Industry

Angela Austin – Associate, Omni Tech InternationalPU Eurasia, Istanbul, 12-14 November 2015

The United Soybean Board (USB)

Represents 590,000 US soybean farmers Revenue based on 0.5% of the soybean

market price per bushel 50% retained by each State where collected, 50% sent to the USB

Supports development and new- use programs

USB funds research with universities, start –ups, SMES, to Fortune 500 companies.

USB typically funds front end innovation

Beneficiaries of USB Funds

Global Soybean Supply

Food Shortage?A world of 7 billion people each eating 40 g of dietary fat/day (the recommended maximum) requires just over 100 million metric tons/ year

The world produces over 160 million metric tons of refined vegetable oil and an estimated 100 million metric tons of dietary fat from meat, dairy, fish, and other dietary sources.

Hunger is real, but it is not caused by shortage of vegetable oils or by their industrial uses

Industrial applications are valuable markets for oversupply of oils due to demand for soybean meal ( protein).

Life Cycle– Soy Polyol

“ Life Cycle Profile Shows U.S. Soy Delivers Environmental & Energy Benefits”

www.soybiobased.org/sustainability“New Life Cycle Profile Shows U.S. Soy Delivers Environmental & Energy Benefits”jpollack@omnitechintl.comwww.nrel.gov/lci

Soy Polyol ProducersCargill - BiOH® Polyols (US) ( Brazil)BioBased Technologies - Agrol™ Polyols (US)MCPU Ind. - Honey Bee™ Polyols (US)Oleon (B)Hobum Oleochemicals (D)BASF/Cognis (D)Harima (PRC) Fengda Jinhua ( PRC)

Global PU Production 2012-15(F)

Region 2012 % AAGR 2013 % AAGR 2014 % AAGR 2015

(Kt) 2013/2012 (Kt) 2014/2013 (Kt) 2015/2014 (Kt)

NAFTA 3,150 4.8% 3,300 6.7% 3,522 6.8% 3,760

S.America 810 3.7% 840 -5.2% 796 -4.0% 764

China 6,020 9.6% 6,600 7.6% 7,100 7.7% 7,650

EMEA 5,355 2.5% 5,490 3.5% 5,682 3.8% 5,900

Asia Pacific 2,575 6.0% 2,730 5.5% 2,880 6.9% 3,080

Total 17,910 5.9% 18,960 5.4% 19,980 5.9% 21,154

Global PU Production by Product Type

Source: IAL Consultants

Global Raw Material Demand 2012-2015(Forecast)

Raw material 2012 2013 % AAGR 2014 % AAGR 2015 % AAGR

Kt Kt 2013/12 Kt 2014/13 2015/14

MDI 5,030 5,410 7.6% 5,785 6.9%

6,145 6.2%TDI 1,955 2,050 4.9% 2,137 4.2% 2,198 2.9%Aliphatic Isocyanate 250 275 10.0% 290 5.5% 306 5.5%Polyester Polyols 1,810 1,870 3.3% 1,940 3.7% 2,070 6.7%Polyether polyols 6,465 6,780 4.9% 7,160 5.6% 7,605 6.2%Additives 2,500 2,638 5.5% 2,668 1.1% 2,830 6.1%

Total 17,910 18,960 5.9% 19,980 5.4%

21,15

4 5.9%

Opportunities for Soy PolyolsFlexible Foam – Slabstock, Moulded & ViscoelasticFroth Foams for carpet backingRigid Foams-spray and OCFElastomeric Protective CoatingsAdhesivesCoatings Structural Composites – Pultrusion

PU Production Turkey -2013

PU Production ( 2013) ( tonnes)Flexible slabstock 135000Flexible moulded foam 12500Total flexible foam 147500

Construction panels 38000Spray foam 5000OCF 6500Domestic & Commercial refrigeration 47000Pour in place- moulded foams 5000Total rigid foam 101500

Shoe sole resin 55000Synthetic leather resin 10000 Coatings, Adhesives & Sealants 30000Binders 2000Cast elastomers 200

Total CASE 97200Total PU Production 346200

Where & Why Use Soy Polyols?

Soy Polyols in PU Flexible Foams

Soy Polyols in Froth Foams

Opportunities for Soy Polyols in Foams for Furniture & Bedding

Global growth in market share of full foam mattresses due to ease of production, especially in Eastern Europe

Growth in demand for full foam mattresses from student and immigrant/refugee populations

Growth in product differentiation and sustainability for export markets and domestic premium market

IKEA during 2016 aim to launch a foam mattress from renewable resources in North America.

IKEA Sustainability Report- 2014“We have been working with our suppliers to test a solution that will enable us to reduce the proportion of petroleum-based, non-renewable foam used in our mattresses. From FY16, a new foam made of 15% soy-oil polyol will be used in our foam mattresses, such as MALFORS and MOSHULT. Soy production can be associated with poor environmental and social standards, so we buy our soy oil from segregated, traceable sources in North America, that comply with our supplier Code of Conduct.”

“[Foams]made from soy could enable our foam suppliers to reduce CO2 emissions significantly. As we find ways to increase the proportion of soy-based material, and combine this with a new process for recycling conventional foam, we can reduce emissions even further.”

Flexible Slabstock –Soy Polyol Opportunities ?

Opportunities in European Automotive

Seating • Suppliers to premium auto seat market are not expected to use soy polyols in the near future

• Most moulded foamers have tested most types of Natural Oils Polyols

• European seat and headliner foams are becoming thinner and of higher density than NAFTA models

• There is a move towards using renewable chemicals as part of the “ green” package, but use depends upon price and performance.

• Complexity of auto OEM specifications limits changes to foams

• VOCs are a major issue for the automotive market

Opportunities for Soy Polyols in Rigid Foams

• Panel manufacturers and appliance focus on energy performance rather than renewable chemicals

• Soy polyols are finding some applications in spray foams due to marketing benefits.

•Natural oil polyol based spray foams are offered by Spain & Belgian manufacturers

•Natural oil polyol based systems are being used in OCFs

Coatings, Adhesives & SealantsSome manufacturers are using soybased polyols and

other NOPs for various products including;2K aliphatic PU floor coatings, speciality road coatings,

slow release agricultural coatingsSealants can use castor oil or soy oil as a plasticiserEU is investing 1 million EUR (USD 1.3 million) into

programs to promote the use of green chemicals including adhesives and sealants

Consumer health and safety is an important driver for these products

Soy Polyols in CoatingsCoatings can now contain high levels of bio-based, they offer unique propertiesImproved hydrophobicity; low sensitivity towards

moistureLow viscosityHigh chemical stabilityBroad adhesion spectrumVery low shrinkageHigh pigment loading, good self levelling

properties „EASY to APPLY“Solvent free, low VOC formulationsPhoto courtesy BASF

ElastomersMerquinsa and BASF use green polyols and bio based

BDO in their “green” TPUsSoy polyol based elastomers can have some use in

the specialty footwear sectorSpeciality footwear sector remains a niche market but

is more price elasticCast elastomers using renewable chemicals are

produced in Australia and India for processing into components supplied to Europe.

Cast elastomers using soy polyols have better abrasion resistance, good for steel mill and paper rollers

Pultrusion for profiles

Use of soy based resin used

In pultrusion techniques to

Produce window profiles and

Lightweight shelves from

Bayer Material Science (US).

Why Use Soy Polyols?• Soybean oil is a triglyceride containing unsaturation

with approx. 4.5 double bonds per molecule. Unsaturation during polyol production provides site for chemical reactivity

• Soy polyols can meet company sustainability goals

• Soy polyols offer unique chemical structures and differentiated performance

• Production economics and product ranges continue to expand and improve

• Soy polyol costs are less volatile than petchem polyols

• Long term security in supply

Why Use Soy Polyols?Replace petroleum based chemical content by 5-80% in flexible

and rigid foams and up to 70% in memory foam. Foams can qualify for USDA BioPreferred® status & preferential

Federal purchasing Foams are stable and process easilyCan dissipate heat 30% faster than PCMs in some memory

foams.Can replace up to 60% latex in binder systems such as for

carpet backing.Require less cell opener, less hardener needed in flexible foamsCan create lower shrinkage rates in block foams

Soy polyol -Properties

Create a silky feel to memory foamOffer superior sound deadening propertiesOffer a higher sag factor Create a lower rebound than standard foams –

good for acoustic and vibration insulationExcellent properties for flame lamination foamsLower OH number needing less MDI in some

foam systems Offer excellent hydrophobicityOffer superior abrasion resistance in cast

elastomers

Soy polyols - Properties

And……..

Soy polyols can be made

from >92% to 98% renewable materials.

Challenges & OpportunitiesPolyols suppliers have attained REACH registration for

some grades for the EU markets, non EU markets present opportunities too

Suppliers are working to create a reliable supply chain in Europe and further afield

Continue education program amongst PU industry to overcome environmental and food issues

Promote the technical benefits of using soy polyols

Acknowledgments

Thank you to the following organisations for their

contributions:

* BioBased Technologies LLC

* Cargill Industrial Oils Division

* Natural Foams Technology

* OmniTech International

* United Soybean Board