Novel Chemicals – More than a Faster Horse

June 12, 2013 | Jim Lane

By Mike Knauf
CEO, Rivertop Renewables

Henry Ford is reported to have once said “If I asked my customers what they want, they simply would have said a faster horse.” Think of the incredible innovations we would have missed out on if Ford had simply created a “drop-in replacement” for the horse.

I see a similar opportunity with today’s chemical industry. While there have been incredible developments and innovations in bio-based chemicals and products, most of the efforts have been, effectively, a faster (or perhaps greener) horse.

While improvements in the sustainability of many of the household products we rely on are much needed, we can aim higher than simply providing the status quo at a lower cost and from a greener source.

We have the capability – today – to fundamentally reshape the future of chemistry, and in doing so, positively shape the future economic, social and environmental sustainability of the planet.

Beyond drop-in replacements — novel chemicals

But to do so, we need to move beyond drop-in replacements to the development of novel chemicals. Make no mistake – drop-in replacements offer solid benefits to companies developing them and the shareholders that fund them. After all, the price point has been set, there’s no new market risk, and the chemical has the benefit of being greener. Many of today’s companies are taking direct aim at an incumbent chemical and saying, “If I can meet or slightly beat the price point, as long as my chemical is greener, I can win.”

Developing novel chemicals may come with a different set of risks from a market perspective, but the rewards are likely greater. With novel chemicals there is no set price point because there is no comparable product. The sales cycle is longer as well. So why do it?

Because having the ability to integrate your chemical into the innovation cycle of your customer is a much better long-term position. You create a new source of value rather than just enabling “me too” competitiveness. Your position is fortified because it has become part and parcel of their solution. If they can’t “drop it in” they can’t “drop it out” when some new company comes along with a slightly greener, or slightly cheaper, commodity chemical.

Unleashing innovation across the consumer landscape

These are the benefits to the novel chemical producer. There are other benefits to the greater society. Novel chemicals can unleash innovation across the consumer landscape. At Rivertop, we’ve developed a game changing oxidation technology that offers shutdown economics, new-to-market chemicals and a value-creating platform for our customers.

This platform has the ability to create novel chemicals and building blocks that enable innovation across an array of industries, starting with detergents and extending into oil & gas, building & infrastructure, agriculture, personal care, food and plastics.

Now, Rivertop doesn’t have the expertise, capital or bandwidth to address these markets all by itself. Novel chemical providers don’t have to, however, because customers in these industries can integrate these chemicals into their own innovation cycles.

By developing new chemical approaches and novel products, novel chemicals provide innovation opportunities for customers. Consumer products companies, for example, now have new chemical “tools” to use in building better (and greener) products to delight their customers.

Driving biology to industrial scale

We’ve created this platform by innovating within the field of industrial chemistry, rather than attempting to drive biology to an industrial scale. While the biological route is fascinating and shows great promise, the costs and complexities of developing and commercializing a biological approach are daunting primarily because living organisms behave differently under different conditions and don’t always do what you want them to do.

Conversely, scaling industrial chemistry is a well-worn path, and we can take a much more linear approach. If it works at 1,000-pound scale it can likely be engineered to work at 10,000-pound scale; or you can add scale by simply adding units. It’s why the capital cost for a 100 million pounds/year facility using Rivertop’s oxidation process will cost about one-fourth as much as a comparably-sized facility reliant on a biological approach.

We’re not alone. Other companies like Bioformix, Elevance and Segetis are doing incredible work in novel chemicals, partnering with leaders in established industries to revolutionize their products. By focusing on novel products, these companies, and Rivertop Renewables, are not just riding the green wave, we’re driving innovation that promises to deliver an exciting future for our customers and our customers’ customers, too.