Workshop: Biotech Processes Workshop: Biotech Processes OverviewOverview

February 16, 2006February 16, 2006Milan, ItalyMilan, Italy

““Worldwide Biotech Process Overview on Industrial BiotechnologyWorldwide Biotech Process Overview on Industrial Biotechnology””presented by Maurizio presented by Maurizio AnastasioAnastasio & Aurelio & Aurelio VigliaViglia

22ndnd Part: The White IndustryPart: The White Industry

www.interproj.it

TABLE OF CONTENTSTABLE OF CONTENTS

nn IntroductionIntroductionnn AdvantagesAdvantagesnn What about in the most advanced countriesWhat about in the most advanced countriesnn Mission of BiotechnologyMission of Biotechnologynn Growth perspectives Growth perspectives nn Products from biotech processesProducts from biotech processesnn Amino acids Amino acids nn Vitamins Vitamins nn Pigments, Flavours, FragrancesPigments, Flavours, Fragrancesnn Crop bioCrop bio--protectorsprotectorsnn Conclusions Conclusions nn BibliographyBibliography

INTRODUCTIONINTRODUCTION

nn Industrial Biotechnology, after pharmaceutical (first Industrial Biotechnology, after pharmaceutical (first wave) and agricultural applications (second wave), is wave) and agricultural applications (second wave), is promising to reshape the manufacturing industrypromising to reshape the manufacturing industry

nn Renewable raw materials as starting product and Renewable raw materials as starting product and micromicro--organisms and/or their enzymes are used to organisms and/or their enzymes are used to make useful chemical compounds and biomaterialsmake useful chemical compounds and biomaterials

nn It is now increasingly being applied to produce both It is now increasingly being applied to produce both bulk chemicals and other chemicals as, e.g. food bulk chemicals and other chemicals as, e.g. food additives, pigments, vitamins, solvents, enzymes for additives, pigments, vitamins, solvents, enzymes for food industryfood industry

ADVANTAGESADVANTAGES

The technology presents some advantages of a The technology presents some advantages of a clean process as follows:clean process as follows:

•• waste: less or no generationwaste: less or no generation

•• COCO22: less generation: less generation

•• water: reduced consumptionwater: reduced consumption

•• energy: reduced consumptionenergy: reduced consumption

WHAT ABOUT IN THE MOST WHAT ABOUT IN THE MOST ADVANCED COUNTRIESADVANCED COUNTRIES

Industrial Biotechnology has a strong impact on:Industrial Biotechnology has a strong impact on:

nn Economy: stimulating growth, especially in farm and forestry Economy: stimulating growth, especially in farm and forestry economies and industrieseconomies and industries

nn Environment: by reducing emissions of carbon dioxide, Environment: by reducing emissions of carbon dioxide, reducing soil erosion, protecting water suppliesreducing soil erosion, protecting water supplies

nn Energy independence: by increasing domestic production Energy independence: by increasing domestic production and reducing dependence on foreign sources of fossil fuelsand reducing dependence on foreign sources of fossil fuels

nn Competitive positioning: opening up new technologies, Competitive positioning: opening up new technologies, industries, and exportindustries, and export

MISSIONMISSIONIndustrial Biotechnology will answer to some Industrial Biotechnology will answer to some

specific needs:specific needs:

•• Science and TechnologyScience and Technology: to accelerate the research : to accelerate the research and development of technologies able to overcome and development of technologies able to overcome difficulties due to the complexity of biomass resources difficulties due to the complexity of biomass resources and processesand processes

•• EnvironmentEnvironment: To ensure that new technologies and : To ensure that new technologies and increased use of biomass will not adversely affect increased use of biomass will not adversely affect land, water, air, and public healthland, water, air, and public health

•• EducationEducation: To provide institutions, industry, farmers, : To provide institutions, industry, farmers, landowners, and the public with information that will landowners, and the public with information that will help them acceptance of help them acceptance of bioproductsbioproducts

•• MarketMarket: To cut time for the commercialization of new : To cut time for the commercialization of new and emerging technologies and productsand emerging technologies and products

GROWTH PERSPECTIVES OF GROWTH PERSPECTIVES OF BIOBIO--INDUSTRYINDUSTRY

nn At the present timeAt the present time for the entire chemical industry, the for the entire chemical industry, the penetration of biotechnology is estimated at 5%.penetration of biotechnology is estimated at 5%.

nn In 2010In 2010 the penetration degree is estimated to lie between the penetration degree is estimated to lie between 30 to 60% for fine chemicals and between 6 to 12% for 30 to 60% for fine chemicals and between 6 to 12% for polymers and bulk chemicals.polymers and bulk chemicals.

nn By 2010By 2010 it is expected to increase to between 10 it is expected to increase to between 10 -- 20%.20%.

nn The penetrationThe penetration will depend on a number of factors such as will depend on a number of factors such as the price for crude oil and agricultural raw materials, the price for crude oil and agricultural raw materials, technological developments and the political plans to technological developments and the political plans to support this new technology.support this new technology.

SALES VOLUME 2001 VS SALES VOLUME 2001 VS SALES VOLUME 2010SALES VOLUME 2010

Source: Festel Capital 2004; Mckinsey 2003; Frost & Sullivan 2003

PRODUCTS FROM BIOTECH PRODUCTS FROM BIOTECH PROCESSESPROCESSES

nn Amino acidsAmino acidsnn Vitamins Vitamins nn PigmentsPigmentsnn FlavoursFlavours--Fragrances Fragrances nn Fine Chemical IngredientsFine Chemical Ingredientsnn Crop bioCrop bio--protectorsprotectorsnn SolventsSolventsnn SugarSugar--based Plasticsbased Plastics

AMINO ACIDSAMINO ACIDS--11

nn Amino acids are the natural building blocks of Amino acids are the natural building blocks of proteinsproteins

nn Previously, only a small number of amino Previously, only a small number of amino acids were produced by industrial acids were produced by industrial biotechnology biotechnology

nn Nowadays, almost all the natural LNowadays, almost all the natural L--amino amino acids, and some Dacids, and some D--amino acids for amino acids for pharmapharma--industry, are produced by fermentation or industry, are produced by fermentation or enzyme technology in very largeenzyme technology in very large--scale scale industrial productionsindustrial productions

AMINO ACIDSAMINO ACIDS--22

•• World demand for amino acids will grow over 5 World demand for amino acids will grow over 5 percent annuallypercent annually

•• Lysine will lead gains as it finds greater use in Lysine will lead gains as it finds greater use in chicken and pig dietschicken and pig diets

•• Applications in animal feed, food and beverage, Applications in animal feed, food and beverage, pharmaceuticals and pharmaceuticals and nutraceuticalsnutraceuticals

•• Amino acids world market: $ 5.5Amino acids world market: $ 5.5--6.0 billion per year6.0 billion per year

AMINO ACIDSAMINO ACIDS--33

food/feed and pharma>200,000 Threonine

pharma10,000Phenylalanine

food/feed and pharma100,000Tryptofane

food/feed and pharma700,000L-Lysine

taste enhancer in food1,500,000L-Glutamic acid

USEUSEPRODUCTIONPRODUCTION(tons/year)(tons/year)

AMINO ACIDAMINO ACID

VITAMINSVITAMINS--11

•• Vitamins are important fine chemicals that are produced in Vitamins are important fine chemicals that are produced in relatively large quantitiesrelatively large quantities

•• Some vitamins can be prepared only via biotechnology Some vitamins can be prepared only via biotechnology such as vitamin B12such as vitamin B12

•• Other vitamins can be produced either by chemical routes Other vitamins can be produced either by chemical routes or biotech routes and/or a combination of bothor biotech routes and/or a combination of both

VITAMINSVITAMINS--22

•• Vitamin B2 (Vitamin B2 (riboflavineriboflavine 4,000 t/year): good example of 4,000 t/year): good example of chemicalchemical--biotech combination; synthesis of Dbiotech combination; synthesis of D--ribose by ribose by fermentation utilizing fermentation utilizing BacillaciaeBacillaciae, , followed by chemical followed by chemical reactions (8 steps) to obtain riboflavinreactions (8 steps) to obtain riboflavin

•• This hybrid synthesis has been recently replaced by a This hybrid synthesis has been recently replaced by a complete biotechnological synthesis of riboflavin in one complete biotechnological synthesis of riboflavin in one single fermentation step (Roche, ADM, BASF)single fermentation step (Roche, ADM, BASF)

•• The production cost of the new biotechnological process is The production cost of the new biotechnological process is 40% lower than the conventional process40% lower than the conventional process

PIGMENTS, FLAVOURS and PIGMENTS, FLAVOURS and FRAGRANCESFRAGRANCES--11

•• Pigments produced by biotechnology have an important Pigments produced by biotechnology have an important marketing advantage because consumers donmarketing advantage because consumers don’’t accept t accept synthetic substancessynthetic substances

•• AstaxanthinAstaxanthin, a dark, a dark--red pigment, added to the feed of red pigment, added to the feed of aquaculture raised salmon to obtain the beautiful pink salmon aquaculture raised salmon to obtain the beautiful pink salmon meat, could be produced by a direct fermentation processmeat, could be produced by a direct fermentation process

•• MonascinMonascin, orange red food/drink pigment, is produced by , orange red food/drink pigment, is produced by fermentation processfermentation process

PIGMENTS, FLAVOURS and PIGMENTS, FLAVOURS and FRAGRANCESFRAGRANCES--22

•• The synthesis of 4The synthesis of 4--decalactone, a peach aroma, is based on a decalactone, a peach aroma, is based on a fermentation process with the yeast fermentation process with the yeast YarrowiaYarrowia lipolyticalipolytica (BASF)(BASF)

•• RR--dd--dodecanolidedodecanolide, the butter aroma, has been produced , the butter aroma, has been produced starting from 5starting from 5--ketododecane acid with the help of bakerketododecane acid with the help of baker’’s s yeast as the biocatalyst (Unilever, UK)yeast as the biocatalyst (Unilever, UK)

•• Butyric acid and its Butyric acid and its ethylestersethylesters have been obtained by have been obtained by fermentation since a long time and are used in cheese aroma, fermentation since a long time and are used in cheese aroma, fruit aroma, etcfruit aroma, etc……

CROP PROTECTIONCROP PROTECTION--11

•• Six multinational companies (BASF, BAYER CROPSCIENCE, Six multinational companies (BASF, BAYER CROPSCIENCE, DOW AGROSCIENCES, DOW PONT, MONSANTO, DOW AGROSCIENCES, DOW PONT, MONSANTO, SYNGENTA AG) dominate the agricultural input market (80%)SYNGENTA AG) dominate the agricultural input market (80%)

•• They are critical actors in promoting, or preventing, the They are critical actors in promoting, or preventing, the development of technologies that shape the future of food and development of technologies that shape the future of food and farmingfarming

•• In 2004, a surge in the chemical pesticide market led to record In 2004, a surge in the chemical pesticide market led to record global sales of US $ 32,665 (Euro 26,785) millionglobal sales of US $ 32,665 (Euro 26,785) million

CROP PROTECTIONCROP PROTECTION--11

Source: Market analysis, Pesticides News 68 (2005)Market analysis, Pesticides News 68 (2005)”” elaborated by A. elaborated by A. AnastasioAnastasio

CROP PROTECTIONCROP PROTECTION--22

Global agrochemical sales by region in 2004

Latin America 13,8%

Rest of World 9,7%

North America 27%

Asia Pacific 25,3%

Western Europe 24,2%

Source: Market analysis, Pesticides News 68 (2005)” elaborated by A. Anastasio

CROP PROTECTIONCROP PROTECTION--33

Biological Control Agents (Biological Control Agents (BcaBca))

nn For many years, biological control research For many years, biological control research organisations have developed methods for crop organisations have developed methods for crop protection and nonprotection and non--agricultural useagricultural use

nn In spite of these intense technical and scientific In spite of these intense technical and scientific efforts, living organisms and biological products efforts, living organisms and biological products account for only 1% of the world marketaccount for only 1% of the world market

nn 80% of biological market is covered by one product: 80% of biological market is covered by one product: Bacillus Bacillus thuringiensisthuringiensis

CROP PROTECTIONCROP PROTECTION--44

The worldwide market of BCA amounts to about The worldwide market of BCA amounts to about €€ 250 250 million (next slide); million (next slide);

BCAsBCAs are very specific, completely biodegradable and are very specific, completely biodegradable and their development costs are favourable compared to their development costs are favourable compared to their chemical ones;their chemical ones;

Various Various Bacillus Bacillus thuringiensisthuringiensis bacteria produce bacteria produce endotoxinsendotoxins that are toxic for insects but totally harmless that are toxic for insects but totally harmless for human beings; for human beings;

These bacteria are grown in fermentation processes.These bacteria are grown in fermentation processes.

CROP PROTECTIONCROP PROTECTION--55Global Global biopesticidesbiopesticides and synthetic pesticides market, 2003and synthetic pesticides market, 2003--20102010

($ millions)($ millions)

SourceSource: BCC, : BCC, IncInc

INTERNATIONAL CONTEXTINTERNATIONAL CONTEXT

Europe and the USAEurope and the USA: leaders and still on a par with : leaders and still on a par with respect research and industrial transfer of research respect research and industrial transfer of research results into marketable products. results into marketable products.

USAUSA: Agriculture and Energy Departments have already : Agriculture and Energy Departments have already allocated allocated hurgehurge money amount to promote the use of money amount to promote the use of white biotechnology processeswhite biotechnology processes

EuropeEurope: still occupies a leading position in white : still occupies a leading position in white biotechnology, but in terms of funding policy Europe lags biotechnology, but in terms of funding policy Europe lags far behind the USA.far behind the USA.

Japan, China, and IndiaJapan, China, and India

JapanJapan can look back on a long tradition of can look back on a long tradition of white biotechnology, predominantly in the white biotechnology, predominantly in the area of food. In Japan mass production of area of food. In Japan mass production of amino acids, particularly amino acids, particularly glutamicglutamic acid, acid, began. began.

China and IndiaChina and India: are both undergoing rapid : are both undergoing rapid expansion. China in particular has already expansion. China in particular has already acquired an important position in the fields acquired an important position in the fields of basic and fine chemicals (vitamins, of basic and fine chemicals (vitamins, enzymes and amino acids)enzymes and amino acids)

CONCLUSIONCONCLUSIONThere is the urgent need of adequate funding to There is the urgent need of adequate funding to promote:promote:

nn R&D activities in Small and Medium CompaniesR&D activities in Small and Medium Companiesnn A strong and actual collaboration between A strong and actual collaboration between

University and Industry University and Industry nn Policy for Technology Transfer and protection of Policy for Technology Transfer and protection of

Intellectual PropertiesIntellectual Propertiesnn Political initiatives Political initiatives nn Public educationPublic education

MAIN BIBLIOGRAPHYMAIN BIBLIOGRAPHYA McKinsey study: Bachmann, R. Industrial Biotechnology A McKinsey study: Bachmann, R. Industrial Biotechnology ““New New value creation opportunitiesvalue creation opportunities”” McKinsey & Co, (McKinsey & Co, (20022002).).FDAFDA’’ss report: report: ““Innovation or Stagnation? Challenge and Innovation or Stagnation? Challenge and Opportunity on the Critical Path to New Medical ProductsOpportunity on the Critical Path to New Medical Products”” ((20032003). ). BCC Inc.: BCC Inc.: YatinYatin ThakoreThakore, , ““CC--204R 204R The New The New BiopesticideBiopesticide MarketMarket””,,((20062006).).Barbara Barbara DinhamDinham, , ““Agrochemical markets soar Agrochemical markets soar –– pest pressures or pest pressures or corporate design?corporate design?”” Market analysis Pesticides News 68 (Market analysis Pesticides News 68 (20052005).).The The FreedoniaFreedonia Group: Group: World amino World amino acidsacids toto 20042004-- Market Market sizesize, , market share, market share, demanddemand forecastforecast and and salessales ((20002000).).A European Technology Platform for Sustainable chemistry: the A European Technology Platform for Sustainable chemistry: the

vision for 2020 and beyond document for the 9 November 2004 vision for 2020 and beyond document for the 9 November 2004 workshop to be held in Brussels.workshop to be held in Brussels.