Innovation in an advanced Biorefinary

Kristin Misund Ph.D.

R&D Director

Table of content

• Borregaard’s biorefinary concept

• The innovation system

• The R&D organisation

• Examples of recent/ongoing

innovation

• Outcome of Borregaard’s innovation

effort

Biorefinery – Business model

Borregaard is the global leader in bio based chemicals. Strong innovation efforts increase the value added to our customers.

Vanillin

Lignin

Specialty cellulose

Ethanol

Green chemistry Borregaard’s biochemicals are sustainable and environmentally friendly

substitutes to petrochemicals

Hemi cellulose 25%

Binding material 30%

Fibres 45%

Biorefining in Borregaard

• The fractionation of biomass into components that may be further refined, giving an optimum and a balanced production of:

– 1. Bio Materials

– 2. Bio Chemicals

– 3. Bio Fuel

– 4. Bio Energy

• The pursuit of the unique properties of our raw materials – not the destruction of them

Borregaard Key Figures 2003-2010

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Global presence

Main office

Sales office

Production

Borregaard 2011 Turnover: USD 750 mill. 1200 employees in 20 countries

Updated: 03.08.2007 - Page7

450 mill. USD turnover

850 employees

75 man years dedicated to innovation

Consumes: 1 mill. sm3 spruce/year

Produces:

150.000 ton speciality cellulose

- 150.000 ton speciality lignin

- 1500 ton biovanillin

- 20 mill. l 2.generation bioethanol

- 200 GWh bioenergy

- 30 GWh biogas

Advanced biorefining Borregaard Sarpsborg

Updated: 03.08.2007 - Page8

Borregaard’s Biorefinery history

• Leading supplier of specialty cellulose

• Global leader in lignin performance chemicals, 50%+ market share

• Only producer of vanillin from lignocellulosics

• Production of lignocellulosic bioethanol since 1938 (20.000 m3/y)

• 1500 GWh of renewable energy by 2013

Wood Based Chemicals in an Integrated Concept

Table of content

• Borregaard’s biorefinary concept

• The innovation system

• The R&D organisation

• Examples of ongoing innovation

• Outcome of Borregaard’s innovation effort

What is innovation

Innovation is the process of generating and implementing new ideas and solutions

increasing the value added to our customers

Why innovation

In 1889 – when established

• Competitive edge

– Cheap timber

– Cheap energy

– Cheap labor

• Foreign

– Technology

– Capital

2011

• High cost

– Raw materials

– Energy

– Labor

• Competitive edge - competence

– Technology

– Market

– Innovation

Innovation model

Idea database

IMT

Ideas from sales, technical application, R&D, production, external partners

Inter disciplinary development work

Scale-up and commercialization

Co-work with: - customers - universities - institutes - consultants when required

Innovation Management Teams (IMT)

• Cross functional teams consisting of: – Head of business unit, head of innovation, head of commercial

department, head of production, head of R&D

• Responsibility: – Evaluate new project ideas

– Establish goals (time and quality) and align resources

– Review progress

– Terminate projects

– Re-define priority

– Solve problems related for instance to the resource situation

• Frequency meetings: – Every 6 weeks

Important effects of IMT - High-level interdisciplinary evaluation - Alignment of resources

Innovation projects – parameteres to evaluate

• EH&S

• technological fit - competitive edge

• who the customer is

• competitors - product in question and customers end product

• time to market

• “likelihood of success”

• input – working hours

– weeks pilot plant test prod. large scale

– investment - hardware

• output

– CM • this year

• next year

• annual contribution when industrialised

– track record

– technology

• intellectual property

Chemical development

Ultimate objectives:

max value for the customer(s)

– process characteristics

• environmentally sound

• safe

• short

• easy

• robust

• cheap

• standard process equipment

– inventive - patentable

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Project Framework Stage Gate Model

Stage 2 Business

Case

Stage 4 Testing

Stage 1 Pre-project

Stage 3 Development

Stage 5 Launch

Gate 2

Gate 1

Gate 5

Gate 4

Gate 3

Idea

Post-launch Review

SCOPING & FEASIBILITY CHECK Preliminary assessment: - Technical - Business

BUILD BUSINESS CASE Product definition Project justification Project plan

DEVELOP Prototypes (customer interaction) Manufacturing process Marketing plan Finalized IPR strategy

TESTING AND VALIDATION Customer tests Test market Verify full scale manufacturing

INTO THE MARKET Implement marketing

plan Advertising

REVIEW Project efficiency Business realization

IDEA GENERATION Investigate opportunity Alignment with business strategy

The Gates – IMT evaluation points

Cross Functionality

Operations R&D

Tech. Dept.

Sales Marketing

NPD Project Team

Innovation – an interdisciplinary effort

Technological development

Development of market concept

The market concept and the technological solutions are evaluated and developed in an interactive process

Main goals and deliverables R&D

Plan, accomplish and document projects

defined and prioritized by the IMTs

• Development of new

– processes

– products

– Applications

• Optimization of existing

– processes

– products

– Applications

- Inter disciplinary projects

- Prioritized by IMT

1/3 of our effort on step change innovations

Table of content

• Borregaard’s biorefinary concept

• The innovation system

• The R&D organisation

• Examples of ongoing innovation

• Outcome of Borregaard’s innovation

effort

Borregaard R&D – organisation chart

R&D manager

Kristin Misund Ph.D

Group leader

LTFU Group leader

Wood Chem.

Plant manager

SY and POF Pilot

Chem . engineers :2

Operators : 4

Researchers : 4

Chem. engineers : 2

Lab. technicians : 2

Secretary

Kirsti Hansen

Group leader

FOFU

Researchers : 4

Chem. engineers : 5

GroupleaderANFU

Researchers : 7

Chem. Engineer : 1

Lab. Technician : 1

IP managers

Tove Aas Helge

Anders Frölander Ph.D

Groupleader BALI Pilot

Pilot manager

BALI pilot : 1

Senior processeng.: 1

Group leader

POF

Researcher : 6

Chem. engineers : 3

Researchers : 4

Chem. engineers : 2

Lab. technician : 1

Focused lab and pilot groups working together on different projects

R&D staff

2011

Number of employees 61

Number of M.Sc 10

Number of Ph.Ds 24

Average experience (years) 10

Female employees (%) 49 Average age 42

-Located in the same building -Small enough to be flexible -Big enough to be flexible -Small enough for everybody to make a difference -Big enough to be an attractive working environment

Competence profile

M.Sc. Ph.D.

Organic chemistry 3 9

Wood chemistry 1 7

Bio(polymer)chemistry 3 2

Physical chemistry 3

Analytical chemistry 2 0

Microbiology 3

Process technology 1

Table of content

• Borregaard’s biorefinary concept

• The innovation system

• The R&D organisation

• Example of ongoing innovation

• Outcome of Borregaard’s innovation

effort

Biorefinery Options - Profit Considerations

BioMaterials - Polymers - Composites

BioChemicals - Flavours - Monomers - Proteins -Fine chemicals -Speciality chemicals

BioFuel - Bioethanol - Biodiesel - Biogas

BioEnergy -Electricity/Heat - Liquid Fuels - Pellets

Cost/

pric

e

Low

High

Creati

ng

valu

es

Low

High

BIOREFINERY

Chemical Biochemical Thermo chemical Pyrolysis

Biorefinery Options - Profit Considerations

BioMaterials - Polymers - Composites

BioChemicals - Flavours - Monomers - Proteins -Fine chemicals -Speciality chemicals

BioFuel - Bioethanol - Biodiesel - Biogas

BioEnergy -Electricity/Heat - Liquid Fuels - Pellets

Cost/

pric

e

Low

High

Creati

ng

valu

es

Low

High

BIOREFINERY

BALI Process in a Nutshell

Water soluble lignin

Pretreated and ”reactive” pulp

Bagasse (since 2007) Straw Wood

BALI Process in a Nutshell – Sugar Platform

Pretreated and ”reactive” pulp is hydrolyzed using cellulase enzymes

Hydrolyzate = high purity monomeric sugar in solution

Fermentation of C5 and C6 sugars

(ethanol, chemicals, proteins)

Quotes from the world leaders in enzymes - hydrolysis of cellulose to sugars for 2G ethanol production

”We have examined many substrates from bagasse, and Borregaards material is the best we have seen so far. It is among the best substrates we have ever examined”

“This is among the top 10 % of all the results we have ever seen”

IP of BALI technology and related technologies

• Patent application on BALI separation and pretreatment process

– filed 15 Dec 2008

– published 15 July 2010

BALI Biorefinery Pilot Plant will be in operation in 2012

• Location: Borregaard Sarpsborg, Norway

• Flexible feedstock (bagasse, wheat straw, wood)

• 1 metric ton dry matter/day

• Continuous process

• Broke ground May 2011

• Commissioning Q2 2012

• 800 m2 total area

• Budget cost: 130 mill NOK

• Grant form Innovation Norway 58 mill NOK

Biomass - availability

Bagasse, Brazil

Bagasse, EFB, Asia

Wood, cornstover, US

Bagasse, Australia

Wood, Straw, Europe

Summary BALI Pretreatment Process and Objectives

• BALI pretreatment process enables good economy in a biorefinery

• New large potentials for lignins under development - will expand usefulness of the technology

• Excellent for add on to 1st generation bioethanol

• Preferably industrialized in coop with strategic partner to reduce country, feedstock and/or market risks (JV or other models)

Table of content

• Borregaard’s biorefinary concept

• The innovation system

• The R&D organisation

• Example of ongoing innovation

• Outcome of Borregaard’s innovation effort

Organisation for Innovation

New cellulose based materials

Patent application for new process for 2G

bioethanol

Development of new processes within EHS

Environmentally friendly products to

the agro sector

• Innovation – involving the whole organisation

– Top management focus

– Innovation Management Teams

• R&D spending close to NOK 100 million/year

• R&D Centre with 60 employees, 25 PhD’s

• More than 25% of Borregaard’s revenues from new products

Utilisation of ”new” biobased raw

materials