INNOVATION IN A CORPORATE VENTURING FRAMEWORKAlaa-Eldin M. Adris, PhDProfessor, American University in Cairo (AUC)Sabic Chemical Technology Consultant

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Presented by:

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Chemical Process Technology Innovation

• VC Model: Independent Entrepreneurships financed by venture capital and private equity funds

• CV Model: Internal Corporate Entrepreneurship following corporate growth plans and strategic objectives.

• Is Venture Capital Model suitable for serving Chemical and Petrochemical process technology innovation cycle? Why?

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The Full Science Innovation Cycle

• From “Science Innovation” to a commercial product with economic and/or social benefit.

• The way this cycle/process is initiated, nurtured, managed,financed and harnessed depends on either a VC or CV model

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ExplorationResearchDevelopmentDemonstration Commercialization

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What’s a VC and What’s a CV?

Expl. Dem. Com.Dev.Res.

Typical VC Model

Gov. & soft fund

Gov., VC1, FFF Fund

VC2 Fund

VC3 or PE Fund

Fin. Inst. Or Corp. Fund

Typical CV Model

Gov., soft or Corp. Initiated

Gov., VC1, FFF Fund or Corp.

Corp.  Fund

Corp. Fund

Corp. Fund

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The Story of Sabic Acetic Acid Technology

Conclusions of the evaluation study in 1993 on different AA routes triggered the catalyst research on ethane oxidation (KSU).1995 Task force formed in April, with mandate to: Develop a technology for making AA from ethane. SABIC to penetrate the “curtailed” Acetyl business as a licensor.1995 Bench scale catalyst evaluation1996 Phase-I Scale-up (PDU-I) 1966 Freezing development on Gen-III catalyst1997 Novel reactor concept (SABOXR) validation (PDU-II)1999 PDP for 30,000 MTPA plant2000 Approval for plant location at Ibn Rushd

Conclusions of the evaluation study in 1993 on different AA routes triggered the catalyst research on ethane oxidation (KSU).1995 Task force formed in April, with mandate to: Develop a technology for making AA from ethane. SABIC to penetrate the “curtailed” Acetyl business as a licensor.1995 Bench scale catalyst evaluation1996 Phase-I Scale-up (PDU-I) 1966 Freezing development on Gen-III catalyst1997 Novel reactor concept (SABOXR) validation (PDU-II)1999 PDP for 30,000 MTPA plant2000 Approval for plant location at Ibn Rushd

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2000 Alternate catalyst supplier effort initiated2000 Budget approval for the 30,000 TPA plant & catalyst manufacturing plant2000 Basic Engineering & launching VAM development efforts2000 SABIC Acetic Acid Technology announcement (November)2005 Plant Start-up (April 10) [On-Stream Factor – 0.987]2007 Trucking out started from 5th June 2008 Plant load increased to 120% of the nominal capacity

The Story of Sabic Acetic Acid Technology (cont.)

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Oxidative Dehydrogenation vs. Carbonylation

Methanol CarbonylationCO + CH3OH CH3COOH

(Carbon Monoxide) (Methanol) (Acetic Acid)

Tonnage (0.5) (0.5) (1.0)

$/T (150-250) (90-250)

Ethane OxidationC2 H6 + 3/2 O2 CH3COOH + (H2O)

(Ethane) (Oxygen) (Acetic Acid) (Water)

Tonnage (0.5) (0.8) (1.0)

$/T (37.5-125) (30-48)

Issues: Price volatility & Raw material security

Methanol CarbonylationCO + CH3OH CH3COOH

(Carbon Monoxide) (Methanol) (Acetic Acid)

Tonnage (0.5) (0.5) (1.0)

$/T (150-250) (90-250)

Ethane OxidationC2 H6 + 3/2 O2 CH3COOH + (H2O)

(Ethane) (Oxygen) (Acetic Acid) (Water)

Tonnage (0.5) (0.8) (1.0)

$/T (37.5-125) (30-48)

Issues: Price volatility & Raw material security

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Oxidative Dehydrogenation Reaction Network

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ACETIC ACID PLANT BLOCK DIAGRAM

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Catalyst Scale-Up & Commercial Production

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Catalyst Development Innovation

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Reactor Configuration Innovation

HC + O2

Product

BFW

HPS

Conventional Reactor SABOXR

More Productivity

Smaller Reactor

Avoiding Explosion Regime

Better Temperature Control

O2

Product

BFW

HPS

HC

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Reactor Design Innovation - SABOXR

“Tubular reactor with gas injector for gas phase catalytic reactions” US 6818189 B1 Adris et al.

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Areas of Sciences, Expertise and Skills Involved

• Catalysis: formulation, recipe design and screening• Analytical Chemistry: feed and product quality and analytical methods

development• Transport Phenomenon: mass, heat and momentum transfer.• Mathematical skills: (statistical analysis, non-linear regression, model

discrimination and parameter estimation)• Computational fluid dynamics: CFD• Material science and Engineering (MOC testing/selection)• Phase equilibrium expertise (VLE, LLE, separation technology)• Flammability and explosion expertise• Catalyst scale-up expertise (particle modeling, mechanical, etc.)• Health, Safety and Environment expertise

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Areas of Sciences, Expertise and Skills Involved (cont.)

• Reaction Engineering: Reactor design, modeling and testing• Pilot Plants: design, building, commissioning and operation• Process Engineering: flow sheeting, steady state and dynamic simulations.• Process Control: control philosophy, loop design and instrumentation

selection (involving SOP development and documentation)• Management of the innovation cycle sequence and dependencies• Process Economics, Costing, Marketing• Mechanical Engineering & Electrical Engineering• Intellectual Property Protection: patenting, trade secrets, etc.• Technology documentation: DOT and Licensor package• Performance Guarantees Development

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Chemical Process Technology – the cycle features

• Long (could be very long)• Demanding very diverse skill mix• Expensive• Involves outsourcing, which requires political will & power• Pragmatic (cannot afford inventors passion)• Needs an identified “first-to-implement” end user

N.B. Product Development requires less diversebut more focused expertise

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Product, component vs. Process Technology

• Electronics – may be VC or CV• Component or Devise Innovation – may be VC or CV• Optimization Algorithm – may be VC or CV• Product innovation – may be VC or CV• Process Technology Development and Innovation

(for environment, complexity, scientific platform and capabilities, strategic drive, implementation, etc.)

Achieving Cycle fruition, needs Corporate Venturing

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Innovation in a Corporate Venturing Framework

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