HOLDINGS LLC Performance Plastics and the Mission for Bio-Based Polymers December 8, 2014 Olga Selifonova BIO Pacific Rim Summit on Industrial Biotechnology and Bioenergy December 7-9, 2014 San Diego, CA
All Sustainable Wealth of Civilization is Derived from Agriculture and Forestry PXLK 2014 2014 Reluceo Reluceo Holdings Holdings 2
Mission and Vision: To DOUBLE the Economic Output of Existing Crops 2014 Reluceo Holdings 3
Sugars from Cellulosic Biomass Platform Technologies Bioplastics Commercial Success to Date Investors Fatigue? 2014 Reluceo Holdings 4
1998 Who wants to invest in yet another search engine company? Yahoo! Excite Lycos Netscape MSN AOL AltaVista other? http://en.wikipedia.org/wiki/history_of_google 2014 Reluceo Holdings 5
2015 An inflection point for the renewable carbon economy? How To Get It Right 2014 Reluceo Holdings 6
From Ideas to Commercialization Addressing critical weak links early is vital for commercialization success Honest discussions of critical issues at all stages Risk discovery, problem analysis Risk management, problem solutions Perfect technology as much as possible while a start-up is still small Premature rush to commercialization leads to start-up failures 2014 Reluceo Holdings 7
Choosing Right Strategy for Biomass Separation 1. Take C5 only: selective separation & recovery? 2. Lignin and Cellulose are not separated: used as energy source 3. Recovered minerals returned as nutrients for crop production 4. Omnivorous for types of biomass, tolerance for soil contamination 2014 Reluceo Holdings 8
Mastering Biomass A Signature Process The progress from quantity to quality 1. Overcomes the most challenging technical hurdles 2. Drastically reduces CapEx 3. Reduces biomass collection footprint A Qualitatively Different Approach 4. Self-propelled by energy embedded in biomass 2014 Reluceo Holdings 9
Connecting Biomass Chemistry to Products Functional Food Ingredients Performance Bioplastics New Proprietary Molecules Established Industrial Chemicals 2014 Reluceo Holdings 10
Synergy and convergence of concepts Rule-changing proprietary frontpiece for integrating to primary forms of biomass Building on proven technology components and units of operation Industrial strength C5 chemistry processes survivors of the age of fossil carbon industry Recombination of biomass chemistry concepts to shape the future balance in the carbon cycle: PXLK and Gen2 structures 2014 Reluceo Holdings 11
Integrated C5 Approach Selected Biomass Source Patents pending Built on Proven Industrial Practices Xylose (C5) (60-70% syrup) Energy, Steam C6 + Lignin Xylitol (industrial grade) Hydrogenation or Fermentation Thermochemical dehydration Furfural to FA* Minerals For Soil 2014 Reluceo Holdings Anhydro Xylitol LAE** XLK monomer Proprietary and Unique Know-How PXLK BioPlastic Poly Xylitan Levulinate Ketal * FA Furfuryl Alcohol ** LAE Levulinic Acid Ester OVERALL PROCESS COMPLEXITY IS AVERAGE AND COMPARABLE TO PROCESS FOR PET 12
C5 Technology Platform and Value Chain Functional Food - Xylose - Dietary health benefit for control of postprandial hyperglycemia and diabetes prevention - Xylitol - Low caloric sweetener beneficial for diabetes management and dental health Performance Bioplastics - PXLK -Transparent, colorless, ductile, impact resistant bioplastic with excellent tensile strength and high heat deflection (Tg 116 0 C) - Other O OH HO OH OH O O O O O O n Established Industrial Chemicals - Furan derivatives - for Ag and pharma, foundry thermosets, monomers, wood preservation, Spandex New Proprietary Molecules - Pentitol based - Functional ingredients for household consumer goods, cosmetics, deicers 2014 Reluceo Holdings 13
Economic Impact Global Opportunities Biomass Type C5 (%) Corn Cobs 30-32 Oat Hulls 29-32 Wheat Straw 25-27 Xylose (C5) is the second most abundant sugar on Earth after glucose (from starch, cellulose) HO O OH OH OH Sugar Cane Bagasse 25-27 Birch Wood 27 Oil Palm EFB, Fronds 22-30 Eucalyptus Wood 20 Rice Hulls 16-18 2014 Reluceo Holdings 14
Key for C5 Carbohydrates Platform Success Low CapEx production of C5 sugars from biomass O OH HO OH OH High value/ high impact products from C5 sugars 2014 Reluceo Holdings 15
The Bioplastic Potential: A Trillion Dollar Economy Selected C5-rich Ag Biomass Production* PXLK Bioplastic Potential Production @12% yield from biomass All Plastics Production (Worldwide, 2011) 2,480 MM T/Y 297 MM T/Y 280 MM T/Y Wheat Straw Oats, Barley and Rice Straw, Hulls Corn Cobs, Stover Rye, Millet and Sorghum Straw Sugar Cane Bagasse Oil Palm: Fronds, EFB, Trunks The five plastics types: Polyolefins, PVC, PS, EPS and PET account for about 70% of the total** ** www.plasticseurope.org * Dry Weight 2014 Reluceo Holdings 16
Setting Standards for Plastics: Benign by Design 2014 Reluceo Holdings 17
Benign by Design: Leading by Example PXLK: High performance (thermal, tensile, impact resistance, optical) Renewable: non-food C5 sugars from cellulosic biomass Devoid of toxic monomers and additives Degradable via hydrolytic de-polymerization with a controlled rate (to fully biodegradable monomers) 2014 Reluceo Holdings 18
0.00 PXLK as a Substitute for PMMA and PC Tensile Strength (relative %) 140.00 120.00 100.00 80.00 60.00 PXLK-Lower MW PXLK-Higher MW* PMMA PC 40.00 Heat Deflection ( C) 20.00 Elongation at break (relative %) Notched Impact (IZOD) (relative%) * PXLK-Lower Mn sample (~43,000) had subcritical Mn for true measurement of Notched Impact IZOD. Notched Impact Strength (IZOD) is projected to increase >2x in PXLK-Higher Mn (>50,000). PMMA - Poly(methyl methacrylate) PC Polycarbonate (89% Poly(BisPhenolA)-co-11% Carbonate)) 2014 Reluceo Holdings 19
0.00 PXLK as a Substitute for PMMA and PC Tensile Strength (relative %) 140.00 PXLK-Lower MW 120.00 PXLK-Higher MW* 100.00 80.00 PMMA 60.00 PC Heat Deflection ( C) 40.00 20.00 Elongation at break (relative %) PLA (polylactide) Notched Impact (IZOD) (relative%) * PXLK-Lower Mn sample (~43,000) had subcritical Mn for true measurement of Notched Impact IZOD. Notched Impact Strength (IZOD) is projected to increase >2x in PXLK-Higher Mn (>50,000). PMMA - Poly(methyl methacrylate) PC Polycarbonate (89% Poly(BisPhenolA)-co-11% Carbonate)) 2014 Reluceo Holdings 20
PXLK Comparison with Incumbent Plastics Averaged Data PXLK* PMMA PC PET PS ABS PP PEEK PLA PHB(A) Tensile Strength (MPa) 82 60 70 55 45 45 25 85 48 25 Elongation at break (%) 30 3 110 300 3 12 14 50 2.5 4 Notched Impact (IZOD) (J/m)* 90* 20 270 50 60 250 53 91 16 26 Heat Deflection ( C) 100-120 90 135 70 75 95 85 200 58-60 <80 Relative Price Rank (1-5) 2-3 2-3 2-3 2-3 1 1 1 5 1 2-3 Engineering Commodity Performance Bioplastics *Preliminary data: PXLK sample (~43,000) had subcritical Mn for true measurement of Notched Impact Strength (IZOD); projected to increase >2x for PXLK with Mn>50,000. All PXLK values are from unformulated lab specimens. 2014 Reluceo Holdings 21
Market Size and Growth Potential for PXLK Initial market position is envisioned in PMMA and PC application space PMMA & PC Market PMMA & PC Growth ~5-6% New PXLK Plants (at 50,000 T/Y Capacity) ~8,000,000 T/Y up to 480,000 T/Y 9-10 per year 2014 Reluceo Holdings 22
Properties Define PXLK Resin Pricing Selling price for PXLK resin at a commodity scale estimated at $4,000/T Based on cross-check of fundamental properties of resin (thermal, tensile, ductility, optical clarity) with comparable incumbent renewable and fossil carbon products Need 50% less PXLK than PLA plastic to have the same strength of a part/film No premium factored for green or renewable Cost of production at a commodity scale estimated at $1,300-$1,700/T (including CapEx depreciation) 2014 Reluceo Holdings 23
Markets - >$20 Billion Plastic properties and cost define the range of applications and markets Applications 2014 Reluceo Holdings 24
Potential Economic Impact Example for a Company 12-16 dwt% bagasse (C5) to PXLK Additional Revenues Potential (at $4,000/T) $1,600-2,200 MM $575 MM $630-680 MM ~21 Million T/Y of raw cane 8 Mills From: 2012 Bunge Investor Day Presentation by Ben Pearcy www.bunge.com Refined Sugar Fuel Ethanol Electricity C5/PXLK $25 MM 2014 Reluceo Holdings 25
Addressing Additional Challenges CO 2 Emissions Global Warming 2014 Reluceo Holdings 26
Carbon Depository: from Biomass to Durable Bioplastic C5-based bioplastics: a solution for reduction of agricultural fires and for creation of additional value for farmers Burning of crop residues in Congo May 2013 Over 23% of total carbon released annually is from agricultural waste earthobservatory.nasa.gov http://www.fao.org/ag/againfo/programmes/en/lead/toolbox/indust/bioburea.htm http://houstonairquality.com/hazy-days-in-houston-a-closer-look-at-the-recent-central-american-smoke/ 2014 Reluceo Holdings 27
Distributed and Consolidated Steps in the C5 Platform Process Flow: Gradual CapEx Deployment DISTRIBUTED NON-FOOD BIOMASS FIELDS/PLANTATIONS WITH ELIGIBLE CROPS FRONT END HYDROLYSIS UNITS (PILOT=DEMO=PRODUCTION) CONSOLIDATED XYLOSE STREAM TREATMENT UNITS DOWNSTREAM CONVERSIONS OF CONSOLIDATED XYLOSE TO PXLK BIOPLASTIC PRODUCTION TRAIN 4 PRODUCTION TRAIN 3 PRODUCTION TRAIN 2 DEMO PLANT (PRODUCTION TRAIN 1) 2014 Reluceo Holdings PILOT PLANT A-Z 28
Business Models and Options Frontpiece Plants (global licensing model) PXLK Plants (global licensing model) Frontpiece Demo $5 MM 4,000T/Y xylose Commercial Plants $40->->->300MM* 30-50,000T/Y resin Sell semi-finished goods and resin Demo Plant $40 MM 3,000T/Y capacity Sell semi-finished goods Pilot Plant A to Z $10 MM 10-20T/Y PXLK Sell designer products *Gradual CapEx Deployment 2015 2017 2020 2023 Years 2014 Reluceo Holdings 29
Our New Brand GRASPLEX is a trademark of Reluceo Holdings LLC 2014 Reluceo Holdings 30
2015 An inflection point for the renewable carbon economy? 2014 Reluceo Holdings 31
2015 An inflection point for the renewable carbon economy? 2014 Reluceo Holdings 32
Join Us in Our Journey! Thank You www.reluceo.com Olga Selifonova https://www.linkedin.com/in/selifonova Sergey Selifonov https://www.linkedin.com/in/selifonov 2014 Reluceo Holdings 33