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STPP replacement in laundry detergents Freedom to formulate with multi-enzyme solutions 2 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 3 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 4 08/07/2015 NOVOZYMES PRESENTATION Raw materials prices are volatile and increasing - while enzymes are price stable Raw materials price development Jan 2006=Index 100 320 300 280 260 240 220 200 AEO 180 LAS 160 MPG 140 Palm Oil Rock Phosphate 120 Zeolite 100 Enzymes 80 0 Jan 2006 2007 2008 2009 2010 Sources: Agglomerations, purchasing.com, Colin A. Houston & Associates, ICISpricing.com, Reuters, World Bank, Novozymes 5 08/07/2015 NOVOZYMES PRESENTATION Legislative pressure on the use of phosphates in detergents USA, 2010 EU, 2013 • Ban on use in laundry and dish wash detergents • Ban on use in laundry detergents (proposal) • Dish wash detergents to be reviewed 2014 Baltic Sea, 2015 • Sweden: ban on use in detergents, 2011 • Baltic Sea Action Plan: Restrictions on use in detergents, 2015 Legislation is restricting use of phosphates in detergents Concern over the negative impact of phosphate from household detergents on water quality 6 08/07/2015 NOVOZYMES PRESENTATION The industry is moving away from phosphate-based detergents The share of phosphate containing detergents has decreased year-on-year by 16% in Central Western Europe Phosphate-based detergents, % of automatic powder and tablet detergents launched Source: Mintel GNPD, search for automatic detergents in powder or tablet format, listed with ‘phosphate’ or ’phosphates’ in ingredient list. Liquid products were not included as the phosphate content is <5% 8 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 9 08/07/2015 NOVOZYMES PRESENTATION Optimizing detergent formulations with multienzyme solutions Formulation optimization with enzymes can give • Surfactants Surfactants Surfactants Builders Builders Builders Others Yesterday • Same cost and better performance or Lower cost and same performance The right multi-enzyme solution help to optimize performance, keep cost stable and reduce environmental impact by Others Today • Replacing a significant part of surfactants • Replacing Sodium Tripolyphosphate (STPP) in an alternative builder system 10 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 13 08/07/2015 NOVOZYMES PRESENTATION Get better stain removal and whiteness performance – efficient enzymes compensate for STPP replacement Overall wash performance is increased with multienzyme solutions in alternative builder systems Novozymes’ Celluclean in a multienzyme solution offers superior whiteness 1,345 1,350 1,295 1,300 1,286 1,272 1,250 Wash performance, nm R460 Wash performance, nm R460 1,324 1,316 679 680 674 670 665 657 660 650 640 632 630 620 1,200 610 Reference STPP+C2 detergent (STPP) Zeolite +C1 Zeolite CarbonateCarbonate +C2 +C1 +C2 Overall wash performance on 13 technical and 8 natural stains Reference detergent (STPP) Zeolite +C1 Zeolite +C2 Carbonate Carbonate +C1 +C2 Anti-redeposition method: Soil ballast of 1 new WfK sock for each wash cycle. Number of repetitive cycles: 5 C1: 0,66 wt% multienzyme solution,, C2: 1,32 wt% Multienzyme solution Benchmark 16 08/07/2015 NOVOZYMES PRESENTATION Bye-bye phosphate, hello cost savings and compaction Case story: European powder detergent Solution Introduce a multienzyme solution and change the composition of builder system to replace STPP Result A phosphate-free formulation with performance improvements and a 30% reduction of detergent dosage. Ingredient costs were reduced at the same time as was the environmental impact 625 620 610 Wash performance, nm R460 Case objective Replace STPP to save on formulation cost, reduce detergent dosage to get a compact detergent, while maintaining performance at both high and low temperatures 630 630 600 590 580 570 570 560 550 546 540 530 520 510 500 Current formulation Current formulation with with enzymes New formulation, 30% dose reduction New formulation with enzymes, 30% dose reduction Wash conditions: Full scale, EU washing powder, 40ºC, 3 g detergent/L, sum of wash performance on 7 stain groups Benchmark 17 08/07/2015 NOVOZYMES PRESENTATION STPP performance can be matched in a 50% reduced Zeolite system with enzymes Overall wash performance is maintained, while Zeolite content is reduced by 50% 1,279 1,272 1,260 665 1,240 660 1,220 1,200 1,180 1,160 1,140 1,131 1,120 1,100 1,077 1,080 668 670 Wash performance, nm R460 Wash performance, nm R460 1,280 Novozymes’ Celluclean in a multienzyme solution offers superior whiteness 655 650 645 640 635 632 630 625 620 615 1,060 610 Reference detergent (STPP) Zeolite 50% Zeolite 50% Zeolite +C2 Overall wash performance on 13 technical and 8 natural stains Reference detergent (STPP) 50% Zeolite +C2 Anti-redeposition method: Soil ballast of 1 new WfK sock for each wash cycle. Number of repetitive cycles: 5 C1: 0,66 wt% multienzyme solution,, C2: 1,32 wt% Multienzyme solution Benchmark 22 08/07/2015 NOVOZYMES PRESENTATION Improving performance with multienzyme solutions in other alternative builder systems Case objective Identify options to maintain or improve performance in Eastern European detergent, by replacing STPP with an enzyme solution in an alternative builder system Benchmark nm R460 (sum of 12 individual stains) 700 621 578 600 500 472 599 574 440 427 450 582 438 400 300 200 100 0 STPP SKS-6 No enzyme • • SC/SS STPP+SC/SS SKS-6+SQ 0,5% Multienzyme solution SKS-6 - Layered sodium disilicate δ crystalinne • SQ - Sodium sesquicarbonate (Na2CO3 ·NaHCO3· 2H2O) SC/SS – blend of sodium carbonate/sodium silicate (AMCOL propietary) 24 7/8/2015 NOVOZYMES PRESENTATION Multienzyme solutions can bring your detergent to phosphate-free market benchmark 700 Case detergent is bleach-free Result Market leading phosphate-free brand was matched on performance, while cost was kept neutral and the environmental profile of the detergent improved 600 Wash performance, nm R460 Case objective Match market leading phosphate-free brand by introducing a multi-enzyme solution with cost-neutral impact 584 564 500 471 400 300 200 100 0 Market leading P-free brand Low tier, nonenzymatic Pfree brand Washing conditions: LOM, 40ºC, 40 minute wash, 15ºdH, detergent: 5 g/L, 0.3% multienzyme (5 blend) solution Same brand, formulation optimized with 0,3% multienzyme s Benchmark 26 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 27 08/07/2015 NOVOZYMES PRESENTATION Find stability in volatile times with enzymes VOLATILITY The global business environment is affected by many events, leading to high volatility in the markets STABILITY The stable enzyme prices can be used to counter uncertainty –by replacing ingredients with volatile prices, you can stabilize your formulation costs Raw materials price development Jan 2006=Index 100 320 300 280 AEO 260 LAS 240 MPG 220 Palm Oil 200 Rock Phosphate 180 Zeolite 160 Enzymes 140 120 100 80 0 Jan 2006 2007 2008 2009 2010 Sources: Agglomerations, purchasing.com, Colin A. Houston & Associates, ICISpricing.com, Reuters, World Bank, Novozymes 28 08/07/2015 NOVOZYMES PRESENTATION Our estimates show a solid case for cost stability and -improvements through STPP replacement Overall wash performance is increased with multienzyme solutions in alternative builder systems (R460) Formulationspecific cost profile will vary. Novozymes can assist with cost impact assessment Cost profile example Cost of one wash, STPP=index 100 100 97 Reference detergent (STPP) Zeolite +C1 88 88 Carbonate +C1 Zeolite compact + C1 1.316 1.286 1.272 STP P Zeolite + C1 Carbonate + C1 C1: 0,66 wt% multienzyme solution,, C2: 1,32 wt% Multienzyme solution Source: Detergent component prices Jan11, Novozymes estimate. Cost profile is subject to change according to development in ingredient cost and compositions 29 08/07/2015 NOVOZYMES PRESENTATION Reducing dependency on volatile raw materials improves the bottom line in the long term Indexed price development of powder detergents either STPP, Zeolite or Carbone based builder systems, multi-enzyme solution in Zeolite and Carbonate 450 STPP Zeolite Carbonate 400 350 VOLATILITY STPP prices are highly volatile and have increased over time 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 2009 2010 STABILITY Replacing STPP with a multi-enzyme solution in an alternative builder system increases cost stability Sources: Agglomerations, purchasing.com, Colin A. Houston & Associates, ICISpricing.com, Reuters, World Bank, Novozymes 30 08/07/2015 NOVOZYMES PRESENTATION Our estimates show a solid case for significant performance increase at cost stability through STPP replacement Improving performance with multienzyme solutions in other alternative builder systems (R460) Cost profile example Cost of one wash, STPP=index 100 100 575 600 SKS-6 STPP/SC/SS 570 580 SC/SS SKS-6/ SQ Formulationspecific cost profile will vary. Novozymes can assist with cost impact assessment 106 106 100 97 SC/SS SKS6/SQ 480 STPP SKS-6 STPP/SC/SS 0,5% Multienzyme solution Source: Detergent component prices Jan11, Novozymes estimate. Cost profile is subject to change according to development in ingredient cost and compositions 31 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 32 08/07/2015 NOVOZYMES PRESENTATION Green wins with enzymes Surfactants Surfactants Builders Builders Others • Reduce eutrophication and aquatic toxicity • Increase use of bio-based, renewable ingredients • Safeguard water resources Serving consumer needs: • Save energy and time • Enable compaction, saving energy and material resources Products that perform better, have a competitive cost profile and are more sustainable 34 7/8/2015 NOVOZYMES PRESENTATION Focus: Eutrophication caused by STPP in detergents can be eliminated Zeolite based detergent Gr. PO43- eq. saved/wash -99% 12,00 0,65 0,16 Added Saved (no waste Saved (if waste water treatment) water treatment) Carbonate based detergent Gr. PO43- eq. saved/wash Where STPP is used as builder in household detergents it contributes to up to 50% of soluble (bioavailable) phosphorus in municipal wastewater, therefore a reduction in the use of phosphate based detergents should have a positive impact on the eutrophication of surface water bodies* -100% 12,00 0,06 Added 0,63 Saved (no waste Saved (if waste water treatment) water treatment) *European Commision, http://ec.europa.eu/environment/water/pollution/phosphates/index_en.htm Source: Glennie et al., 2002, Novozymes peer-reviewed LCA and estimate of impact 35 08/07/2015 NOVOZYMES PRESENTATION Focus: Reduce eutrophication with enzymes to improve the quality of water • In areas without wastewater treatment systems the waterways are experiencing the direct impact of untreated water both in terms of toxicity and eutrophication • In areas with fully developed wastewater treatment plants, washwater is treated, eco-toxicity and eutrophication reduced, though overflow in capacity constrained situations (eg. floods) can lead to a significant amount of non-treated water being lead directly into waterways Detergent Washing machine Wastewater treatment plant Overflow River 39 08/07/2015 NOVOZYMES PRESENTATION AGENDA Market drivers The concept Improve performance Get cost stability Formulate more sustainable detergents Summary: Freedom to formulate! 40 08/07/2015 NOVOZYMES PRESENTATION Summary With a multienzyme solution you get freedom and flexibility to formulate A similar wash performance can be achieved in alternative builder systems compared to STPP with Novozymes’ solutions Neutral or even reduced cost: Phosphate-free detergents meeting market standards can be formulated ‘for free’ New consumer claims can be offered • Phosphate-free detergent • Tougher on stains • Cleaner clothes, cleaner conscience • Safeguards water resources • Made with efficient bio-based enzymes STPP replacement in laundry detergents Freedom to formulate with multienzyme solutions