People who attend plenty of agriculture conferences are used to seeing PowerPoint presentations featuring numbers of the six- and nine-digit variety.
Last week the elusive 12-digit figure made a rare appearance at Bio-Products Saskatchewan Inc.’s inaugural annual meeting.
Jim Stoppert, Cargill Inc.’s senior director of industrial bioproducts, told Saskatoon conference goers there is a “huge opportunity” for agri-cultural commodities in the $1.5 trillion chemical industry.
He said $1 trillion of that total is carbon-based chemicals that have traditionally been made from fossil fuels. With the price of crude oil soaring, there is an opportunity for environmentally friendly bio-based chemicals made from such crops as corn and canola.
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Analysts expect by 2010, 10-20 percent of those carbon-based chemicals will have at least some crop inputs in their makeup and that’s why Cargill, a company with $60 billion in annual sales, is taking a keen interest in the emerging bioproducts sector.
“It’s going to transform the chemical industry as we know it,” Stoppert said.
Cargill operates one large biorefinery in Nebraska and has plans for more.
“It’s not a big business for Cargill today. We’re really looking at where it will be 20 years from now.”
The biggest driver for what Stoppert called the “bio-industrial revolution” is better and cheaper products for consumers, but it doesn’t hurt that it is a more environmentally friendly and sustainable way of making chemicals.
“Bioproducts are feel-good products for consumers,” he said.
They also give chemical manufacturers a cheery disposition.
Stoppert showed his audience a slide comparing crude oil prices over the last 30 years with soybean oil and corn glucose prices. The crude oil chart blipped up and down like a heart monitor on a biathlete, while the others looked like a person in deep slumber.
“The price of corn hasn’t changed in 15-20 years,” said the Cargill official. Corn will be the main crop input for the bioproducts industry because it’s the cheapest source of carbon in the world. If the sector takes off, there won’t be enough corn to supply it. Refineries will have to turn to agricultural waste materials like corn stover.
But corn isn’t the only raw material that will work. Another speaker at the conference talked about a smaller bioproducts venture involving canola.
Todd Lahti, president of MCN BioProducts Inc., said his three-year-old company has created a fish meal replacement by fractionating canola into a protein concentrate.
“The wonderful thing about agriculture is you can go from the petri dish to the brink of commercialization in three years. That’s what we have done.”
MCN has an alliance with an unnamed crusher to build a facility to convert low value canola meal into a feed ingredient for the aquaculture industry, which is growing at a rate of eight to 12 percent per year.
Lahti said a tonne of canola meal valued at $130 will be converted into a tonne of feed worth $300-$500. After expenses are subtracted, the crusher will be adding $50-$175 a tonne to its bottom line.
The fish meal market is six million tonnes a year. If canola protein claims a portion of that it will help oil-dependent crushers from relying on a single end user.
There should also be opportunities for the product in Europe, where meat and bone meal have been banned.
