Entrepreneurial risk for sustainability

At the 11th Swiss Green Economy Symposium, National Council President Martin Candinas got to the heart of the matter in his welcoming address, saying that the opportunities of the circular economy should be seized together. And said, "The economy must also network and find sustainable solutions." With this, he described exactly the task of the new division head Chemtech of Sulzer AG, Uwe Boltersdorf: the process technology provider connects with partners with the will to switch to separation technology- and apparently meets with interest worldwide.

Air travel and its impact on the value chain

Rahel Galliker, the deputy director of the FOEN (Federal Office for the Environment) said, "If we all lived like Switzerland, we'd need three times the earth's resources." She may have been referring to Switzerland's European record of getting on planes more than its neighbors. At the very time of the symposium, however, Swiss airline introduced the so-called "green fare" as mandatory on domestic flights between Zurich and Geneva. A far more central role in sustainable aviation is played by the increased use of Sustainable Aviation Fuel (SAF) - a new business area for Chemtech. "In Malaysia, we are involved in the construction of a production plant for sustainable aviation fuels and renewable diesel," Uwe Boltersdorf was able to report. Chemtech is providing a BioFlux technology package for Vandeley Ventures. The state-of-the-art facility produces sustainable fuels with limited greenhouse gas emissions using locally sourced renewable feedstocks. This SAF development is strongly regulatory driven, Boltersdorf added.

Driven by consumers

In general, one focus with biofuel plants is currently in Asia. In Taiwan, a leading crude oil processor, CP Corporation, is being transformed into a specialized chemical company. Oil will no longer necessarily be the starting point for processing. The Division President is encouraged by the fact that sustainability issues have also arrived in the emerging markets. He always relies on consumers, whose expectations motivate politicians and businesses to take action.

Investments as a driver for innovation

Sulzer is involved in a number of decarbonization projects. In the Netherlands, the company recently acquired a strategic stake in Fuenix Ecogy, which completes the portfolio for reducing plastic waste. Boltersdorf adds, "We invest in upstream services and partner companies, because you have to bear these risks so that sustainability can be created through technology development." In doing so, the Winterthur-based company relies on risk diversification. "To lower the investment hurdle of our partners and help the process along the way, we use a carve-out of licenses and usage rights to our technologies."

A not insignificant driver in the demand for these processes is the new international regulations that place companies under obligation. For this reason, the process technology provider is also open to negotiations with national governments and political stakeholders. National Council President Candinas then addressed the federal government's expectation of business leaders to meet climate targets: "Sustainability will increase economic efficiency and thus Switzerland's long-term competitiveness."

Identify market trends at an early stage

The division moves agilely in this constantly changing market. "We are able to quickly identify new trends and market requirements." For example, Boltersdorf sees opportunities in the processing of palm oil and vegetable oils in South America, while in the USA he identifies market potential for used cooking oils, i.e. used cooking oils as a raw material base. A little further on the horizon, he sees water treatment technologies emerging. Thus, Sulzer's historically strong appetite for development, which has long since ceased to be limited to fluid engineering, is also likely to play a role in determining the demand dynamics in these future markets.

    Taking advantage of the need of the hour

The increasing demand for sustainable products and processes is currently one of the most important drivers of Sulzer Chemtech's business development, as are international regulations that put companies under pressure. We met Uwe Boltersdorf, Division President of Chemtech since this year, for an interview at the Swiss Green Economy Symposium.

Chemtech is obviously moving very agilely in these new markets. In which emerging markets do you sense impetus?
In fact, we are currently very active in Southeast Asia with biofuel plants. In this region, for example, palm oil and vegetable oils can be utilized. We also see potential in South America, but we need to understand this market better first. If we approach used cooking oils as a feedstock base, markets such as the USA are also exciting. Here, we must be able to limit our technology to small capacities, because used cooking oils are hardly available on large scales.

What are the key drivers in these regions?
A strong driver in the emerging markets is indeed Sustainable Aviation Fuel (SAF). Increased use of SAF plays a central role in sustainable aviation. In Malaysia, we are currently building a production facility for sustainable aviation fuels and renewable diesel. This development is strongly driven by regulation, and the entire value chain is adapting to the resulting requirements.

Do you still have to do a lot of convincing for this service? afford?
The willingness to discuss is there, because entrepreneurs are feeling the consumer pressure more and more. I'm encouraged by the fact that sustainability issues have also arrived in the emerging markets. Five years ago, I would not have believed that the manufacturer of a shampoo would include recycling information on the bottle. It is the consumers who are driving these issues, and this transfers to the expectations of the producer, which in turn allows us to develop new business areas. It's important to understand that while we can make a push from technology development, we always need the pull from consumers for market success.

You said in the expert panel at the Forum that while start-up funding from policymakers is desirable, after that governments should stay out of it. Why?
It is too short-sighted if industry only ever calls for subsidies. Opening up new markets requires an initial spark, but after that it is the industry that must ensure competitiveness. The task of politics - and I say this with conviction - is to ensure good framework conditions. I expect the industrial companies to then scale up on their own.

However, your business model is dependent on partners: Raw material suppliers and processors must work with technology providers to develop the market. If one of these components is missing, Sulzer cannot develop a resilient business model. With these high investment costs, isn't that economically very imponderable?
As a technology provider, we bring in a service package of technology, guarantees and execution expertise and bring the stakeholders in the project together. At the end of the day, it's about risk distribution in the project. To reduce the investment hurdle of our partners and help the process on its way, we use the scope of licenses and usage rights to our technologies.

The profitability of the division last year was just under 10 %.
Based on this profitability, we can make investments in new technologies. Of course, this means we are investing in upfront costs, even in partner companies such as the Dutch company Fuenix Ecogy, in which we now hold a strategic interest. We have to bear the risks of process development and research. Why? If no one offers the technology, nothing can move.

You said in the presentation that Chemtech is constantly developing new solutions. If you look into your crystal ball: what new solution do you see there?
Water will be an issue, and processing technologies for high-purity products, as well as bio-based value chains. We need to think more about new raw materials and their processing. If you ask yourself the question of the most readily available raw material that can be regrown, you end up with cellulose.

When you meet a potential partner or client at a symposium like this, what is your elevator pitch?
Chemical recycling, bio-based processes, decarbonization - we are ready!

 

Source: www.sulzer.com