Category → Petrochemicals
I don’t want it to seem like I am picking on Dow this week.
This was the first day of IHS’s World Petrochemical Conference in Houston. This is my 15th annual conference. So far, this conference is better than average. The place is packed with more than 1,300 people.
Dow executive vice president Jim Fitterling gave an address on the beneficial economic effects of shale. We have been hearing a lot of this kind of thing in recent years. However, Fitterling went way beyond the usual touting of big numbers related to shale petrochemical investment. He said that shale will help lead to a renaissance in American manufacturing in general and is even stimulating greater R&D spending in the U.S. as manufacturers invest in technological research to support their operations. He pointed to Dow’s own planned R&D facility in Lake Jackson, Texas, near its Freeport operations, as an example. Very exciting stuff and very positive.
About that headline. He also took the opportunity to complain about all the liquified natural gas export capacity being planned in the U.S. So called “unfettered” exports would drive up natural gas prices and ruin everything for everybody, companies like Dow say. “No it won’t,” oil companies usually retort.
Now if you have been following this issue, you might have heard the suggestion that U.S. exports of natural gas to Europe would loosen the energy stranglehold Vladimir Putin has on Europe. “Don’t even go there,” Fitterling said. No, he didn’t say that. Actually he said this:
Now we are pointing to the Ukraine and arguing that we must fast track LNG exports to help our allies in Europe. Even our own energy secretary says that’s a weak argument, especially given the long lead time and financing to build these terminals. And let’s not forget, Europe has the resources and the capability to provide for its own energy [consumption]. Just because they have rejected nuclear energy and horizontal drilling, and left themselves at the mercy of others, shouldn’t create an obligation for us to bail them out by shipping our advantage to them.
If Europe really wants to be energy competitive and energy secure, it cannot walk away from nuclear and they must embrace horizontal drilling and exploration. The same policies that made America competitive are available to Europe today.
The real question we should ask is a simple one: what is our foreign policy, especially when it comes to our valuable energy resources? Shouldn’t we know that with some certainty before we just launch ahead blindly?
I heard at least one person attempt to start a round of applause while he was still talking. He rocked the house at the chemical conference to the extent that the house at a chemical conference can be rocked. And I am willing to bet that more than a few European chemical executives, who aren’t slow themselves to gripe about Europe’s high energy costs, agreed.
Incidents at chemical plants in Louisiana one week ago left three people dead. Two were killed in an explosion and fire at a Williams Cos. ethylene cracker in Geismar. One died when a nitrogen manifold ruptured at a CF Industries complex in Donaldsonville.
A write up by Jeff Johnson and me appears here. The genesis of the story is an interesting one. Last Monday, I called Jeff about blasts. I made the observation that both plants were undergoing work. The Williams plant is being expanded by 50% this year to take greater advantage of shale gas. An ammonia unit at the CF facilities was undergoing a scheduled turnaround.
The process of shutting down, working on, and restarting units is a major danger for chemical operators in a similar way that takeoff and landing are the most treacherous moments of flight.
Jeff is very aware of this. He owns the Chemical Safety & Hazard Investigation Board beat. He also mentioned to me that the CSB is overtaxed. Its staff of 40 has 15 investigations to cover right now. It hasn’t launched an investigation into CF yet for want of manpower.
Shale will lead to a flood of construction the likes of which the U.S. chemical industry has never seen. According to the American Chemistry Council, the amount of capital spending for already announced products is $71.7 billion, and climbing. There will be a big chunk of the chemical industry in the danger zone for accidents.
Back in March, I attended a talk at the IHS World Petrochemical Conference in Houston by Richard Meserole, vice president of energy and chemicals construction at the engineering firm Fluor. He had staggering numbers. In just a 50 mile radius from Houston, 45 projects worth $100 million or more will require 20,000 new craft workers. All these skilled laborers such as welders, iron workers, and pipefitters couldn’t even fit into the Toyota Center for a Rockets game.
Many of these workers will come from outside the region. Many will be recently trained. And though every construction site—even for a back yard deck—present hazards, are all these workers prepared for the particular nuances of an environment with volatile and highly reactive chemicals?
Let us hope that the chemical industry and those regulating it are up to the challenge.
Last week, TPC put out a proxy statement for its controversial $40.00-per-share sale to First Reserve and SK Capital. Shareholders, as evidenced by quotes between $41.00 and $42.00 for the company, are looking for a better offer. And Sandell Asset Management, which owns about 7% of the firm, has been outspoken against the deal. In such cases, disgruntled shareholders always argue that company management didn’t do enough to shop the company around for a better price.
The Chemical Notebook has examined the proxy to get an idea about who was kicking in TPC’s tires and how serious they were:
First Reserve (private equity) and SK Capital (private equity): These companies first darkened TPC’s door in early December with a $30.00 to $35.00 offer. This was rejected by TPC management. However, in early January, TPC and these parties signed a confidentiality agreement and First Reserve and SK conducted due diligence. These efforts yielded a $40.00 to $42.50 proposal by mid-February and a merger agreement was drafted. But in March, TPC’s stock price climbed to an all-time high of $47.03, forcing First Reserve and SK to abandon their bid. When the stock price declined back down in May, First Reserve and SK renewed their efforts. This yielded a $40 “best and final” offer in July. On July 27, SK and First Reserve signed an exclusivity agreement with TPC. The deal was announced on August 27.
Party A (strategic bidder) and Party B (PE): These firms first signed a confidentiality agreement with TPC in January. Later that month, they decided not to pursue a deal because of other priorities. These parties later emerged from time to time throughout the sale process. In May, they told TPC that they might submit a proposal, but they didn’t. In early August, they indicated that they might be interested again if TPCs stock price declined further.
Party C and D (both PE): These companies emerged in late January with a $38 to $38.50 offer. They presented TPC with a draft merger agreement in mid-March. They dropped out in mid-April because of the rising stock price. They reemerged in May 17 but dropped out for good on June 21 because of financing concerns.
Party E (strategic): Contacted by TPC representatives in late-February, Party E said that it wasn’t contemplating strategic investments. It told TPC in mid-May that it wouldn’t submit a proposal.
Party F (non-U.S. strategic): Expressed interest in early April. It said on May 18 it was interested in a bid. TPC representatives traveled to Party F’s headquarters in early June. At the end of the month, Party F informed TPC that it would not submit a bid.
Party G (strategic bidder): It was contacted by TPC representatives. In early June, it said that it was concerned with regulatory impediments (probably antitrust) to a merger. Later that month, it told TPC that there would be no merger due to those concerns.
Party H (strategic): Approached TPC in May but nothing materialized.
Party I (strategic): Indicated interest in late June and made a $36 per share proposal in July. Talks were promptly terminated.
The Chemical Notebook’s two cents: Interest in TPC seems meager. And the highest proposal it heard was $42.50 from SK and First Reserve. (Something would have to be dreadfully wrong if they don’t at least up the bid to that.) On the other hand, with shareholders recently seeing $47.00 per share, I do wonder why the company agreed to sell itself at all.
To counter that argument, TPC would likely point to expensive dehydrogenation projects that it needs to stay competitive. It argued as much in the proxy. The expenditures on these would exceed the company’s market capitalization, it said. Alternative financing strategies, such as forming a master limited partnership, would have to be employed. TPC shareholders would thus not benefit from all of the upside of these investments. True, but some of the upside is better than none of it.
The advent of natural gas from shale could potentially resurrect an old 175,000 bpd Sunoco refinery in Marcus Hook, Pa., near Philadelphia, according to a new report issued by the consulting firm IHS.
The report brainstorms redevelopment concepts and was commissioned by the Delaware County Council, which wants to recover some of the 500 jobs lost when the refinery closed back in December.
The Council and IHS came up with ideas that were a lot more creative than what I have usually seen driving by old industrial properties in New Jersey: 1) Leave it to rust until Mother Nature reclaims it. 2) Tear it down and build retail on it.
All of the report’s proposals involve hydrocarbon processing of one kind of another. Several of the ideas singled out in the report as having high market viability are relevant to chemicals. These are:
1) Propane Dehydrogenation: Braskem has a polypropylene plant downstream from the refinery and, as I have explained before, is likely on the hunt for feedstock.
2) Integrated ethane cracker complex: ANOTHER cracker?
3) Natural gas liquids processing.
Out of these my favorite is the dehydrogenation idea. Though, I have always preferred Philadelphia to Pittsburgh as a location for a Northeast cracker. (Better hydrocarbon infrastructure, plus I can look at it when I pass by on Amtrak on the way back from HQ). NGL processing is promising, too. But why stop there and not create a market for the liquids nearby?
The report looked at other options, too. Refined petroleum products storage (boring!), natural gas power generation (bleh!), LNG export terminal (yeah, THAT will happen so close to Philly), gas-to-liquids production (that could cost up to $6 billion, so forget it).
Cool report. Kudos to IHS and Delaware County for a lot of creative thinking.
A couple of weeks ago I attended a charming annual gathering in Houston: Intellichem’s Latin American Petrochemical Networking Meeting at the Westin Galleria Hotel. There were a few good presentations at the event. One that particularly caught my attention was that of Alfred Luaces, an analyst with Purvin & Gertz, which was recently acquired by IHS.
Here are a few takeaways from the presentation:
1) U.S. natural gas liquids production has risen by 15% since 2008, an increase of 270,000 barrels per day. Judging from the graph Luaces put up, production will increase another 400,000 to 500,000 BPD by 2015. Ethane will grow more than other NGL components like propane.
2) The amount of oil extracted from shale in the U.S. will hit 1 million BPD in by 2015 and 2 million BPD by 2020. (According to the EIA, today’s production, on a reasonably comparable basis that includes condensate and stuff, is about 8 million BPD).
3) Canadian crude production will increase by 700,000 BDP in Western Canada, hitting 3 million BPD by 2015. Here Luaces made a point that is consequential to the XL Pipeline. “We think this will be processed on the Gulf Coast eventually,” he noted. But in the meantime, it will be processed in Midwestern refineries until the capacity of those facilities fill up. This would back out imports from Columbia and Mexico. Much of THAT oil will just go to China. (The XL pipeline issue seems more nuanced than some make it out to be.)
4) The impact of the Gulf of Mexico drilling moratorium—according to a chart—will be about 400,000 BPD this year.
5) Since 2009, 2 million barrels of crude refining capacity has been shut down in North America and the Caribbean, mostly in the Northeast. Another 700,000 in closures may happen this year, the biggest being Sunoco’s Philadelphia refinery.
6) The U.S. is exporting more than 500 million BPD of gasoline, 325,000 BPD of that is to Mexico. The U.S. exported about 200,000 barrels in 2009. (Crack spreads, the margin between oil and refined products, have also been rising.)
7) The U.S. has become a net exporter of LPG (propane). Enterprise, Targa, Conoco/Phillips, and Vitol are planning export terminals or expanding terminals. (This seems to suggest that there may be some propane dehydrogenation opportunities out there.)
There is little doubt that the advent of shale is opening the spigots for massive amounts of new ethylene production in North America. However, a consequence of all the additional production of ethylene is much less production of propylene. Chuck Carr, a propylene analyst at IHS Chemical, gave a great overview of the situation at IHS’s petrochemical conference down in Houston late last month.
As ethylene makers seek to take advantage of the abundance of ethane by cracking less naphtha, they are producing far less propylene. A naphtha cracker, Carr pointed out, will make about a half ton of propylene for each ton of ethylene produced. An ethane cracker will only put out about 20 kilograms of propylene for each metric ton of ethylene made. The amount of propylene coming from steam crackers has declined by 30% in only a few years. Overall, after reaching a peak of about 16 million metric tons in 2007, North American polypropylene production has declined to about 14 million metric tons. Some 54% of propylene is made in oil refineries, only about 40% is now made in ethylene crackers.
Propylene prices are rising, putting polypropylene makers in a tough position. As I heard over and over again at the IHS conference and then at NPE, a plastics trade show put on in Orlando last week, high polypropylene costs are tempting plastics converters to switch to high density polyethylene when they can. Soft drink bottle caps are a key battleground application. If they have seemed a little different lately, now you know why.
One company that jumps out at me as being in a tougher bind than most is Braskem, which recently purchased the polypropylene businesses of Sunoco and Dow Chemical. According to Carr’s presentation, the company has the largest deficit of propylene in North America. In fact, Braskem has no production of propylene in the region.
The company’s Marcus Hook, Pa., plant is downstream from Sunoco’s Marcus Hook refinery. Or at least it was. Sunoco idled the refinery in December and looks to permanently shutter the unit over the summer. It is ending a supply agreement with Braskem in June. The supply agreement covers about 60% of the facility’s 350,000 metric tons of annual polypropylene capacity. A contract with another supplier in the region covers 19% of the capacity.
In its 20-F regulatory filing put out this week, Braskem says it being supplied by Sunoco out of Sunoco’s Philadelphia refinery and from other sources. The polypropylene unit is still operating at normal levels. The company is also in discussions for long-term supplies of propylene from other refineries in the Northeast. “At this time, we believe that, provided Sunoco continues to supply us until June 2012 or we are successful in sourcing additional feedstock supply, the operations and capacity utilization of our Marcus Hook, Pennsylvania plant will not be materially affected,” the company says. The company also raised the prospect of delivering to customers from other plants.
One wrinkle for the Braskem is the Philadelphia refinery. Sunoco is seeking a buyer for that refinery as well. If it can’t, Sunoco is planning to idle it by this summer as well. That would limit Braskem’s options a bit. But maybe Petrobras or PBF Energy or someone else will buy the refinery or something. I do hope that Braskem finds a way to keep the polypropylene unit running.
There seems to be propylene issues at the plants it purchased from Dow in Seadrift and Freeport, Texas. A propylene supply agreement, presumably from Dow, is set to expire in 2013. Dow will likely use that to make its own propylene oxide, acrylic acid, and epichlorohydrin. Braskem, however, probably has more options on the Gulf Coast than it does in the Northeast.
I took my usual seat at IHS’s World Petrochemical Conference at the Hilton Americas in downtown Houston today, front and center, as I have for 12 previous annual conferences run by CMAI. “The world is right when you’re sitting in the front row,” Mark Eramo, vice president of chemical industry research and analysis, said as he passed. He has given the big ethylene talk each year that I have attended the conference.
IHS purchased CMAI since the last conference. I was worried that IHS might mess with a good thing. The conferences have been a bigger and bigger draw year after year. IHS made some changes, but they were for the better. Instead of a keynote by an august petrochemical executive, there was a panel featuring five of them.
That forum gave me the impression that petrochemical executives may be exuberant about the prospects of feedstocks from shale, but they are also realistic. Since the last conference, five companies—ChevronPhillips Chemical, Dow Chemical, Shell Chemicals, Sasol, and Formosa have announced new U.S. ethylene crackers. “Not all crackers that have been announced may be built, certainly not in the announced timeframe,” noted Ben van Beurden of Shell Chemicals.
Jim Gallogly, CEO of LyondellBasell, made a similar point. “It’s likely you won’t see all the crackers advanced,” he said. Lyondell, for its part, is focused on expansions of existing U.S. facilities, to the tune of half a new cracker’s worth of output.
Also, Gallogly mentioned that his company would be interested in a “condo” cracker, perhaps at an existing facility. As I understand the concept, this would be a cracker that would have two or more partners, each with a defined offtake. I remember Dan Smith, a Gallogly predecessor, talking about this concept about a decade ago, just when the Middle East and Asia started getting all the petrochemical investment. If I had to guess how this might play out today, I would think it would be an project involving Lyondell, a partner with access to feedstocks, and maybe a partner trying to back-integrate an ethylene derivative such as ethylene oxide, alpha olefins, or vinyl chloride monomer.
Curiously, in the Q&A, van Beurden kept on getting asked why Shell announced a cracker and Gallogly kept on getting asked why LyondellBasell hasn’t announced a cracker. In fact, one attendee brought up the exact same two problems I noted with Shell project—that Shell no longer makes polyethylene and that Monaca, Pa., is relatively isolated from the rest of the petrochemical world. Van Beurden said there is as a big advantage being close to the converters—customers would enjoy quicker delivery and less working capital tied up in inventory. He also said there was an infrastructure solution to the isolation problem.
As far as Eramo’s talk goes, while here in the U.S. the profits have been enormous, the global industry is actually beginning to climb out of a cyclical supply-side trough. Demand for ethylene is 127 million metric tons globally, he noted, and growing at a 4.3% annual clip. It is forecast to reach 157 million tons by 2016, at which time the industry will likely see operating rates at around 90%, when the industry should see peak profitability.
Shell Chemical has selected the Pittsburgh area town of Monaca, Pa., as the site of its new ethylene cracker complex. Actually it will be in Potter and Center Townships, which are near Monaca, Pa. (Pop. 6,286, according to Wikipedia). But that narrows it down a lot more than what Shell was previously saying: “I don’t know, Appalachia somewhere or something.”
Monaca is a bit of a chemical town. It is host to a Nova complex that makes Arcel polystyrene resins for foams and expandable polystyrene. Nova calls this the Beaver Valley site. (If that name conjures an image of a valley teaming with beavers felling trees willy nilly, I know the feeling.)
This doesn’t mean that the plant is a done deal. As its press release explains:
“The next steps for this project include additional environmental analysis of the preferred Pennsylvania site, further engineering design studies, assessment of the local ethane supply, and continued evaluation of the economic viability of the project.”
The company isn’t saying much more about the project. It will feature an ethylene cracker and downstream polyethylene and ethylene glycol plants. We already knew about that. There’s nothing new about the size or the timing.
I do have a couple of thoughts about the project:
1) Isolated ethylene and derivatives complexes never work out. If the ethylene cracker goes down, how do you run the derivatives plants and where does the ethane feedstock go? If one of your derivatives complexes goes down, do you run the cracker at reduced rates? It would be nice to see another cracker complex built in the neighborhood that would be connected to the Shell site. I suspect that we’ll probably hear from another company with cracker plans in the region before long.
2) I doubt Shell will build its own polyethylene plant. It hasn’t had any skin in the polyolefins game since it sold its stake in Basell to Access Industries in 2005. I am expecting a partner of some kind on the polyethylene unit. If it does go it alone, I would think that the plant would spew out commodity grades of polyethylene. One example of such a product would be high-density polyethylene for extrusion blow molding—used to make milk jugs. Shell would need something that is relatively easy to sell. Also, the company wouldn’t want to do a lot of switching of grades at the plant because of potential problems with excess ethylene, as I mentioned above.
All this aside, it is great to see such a big chemical plant being contemplated for the region.
You may have heard that Georgia Gulf has rebuffed a $30-per-share takeover bid from Westlake. Here are a few points:
1) By my calculations, the bid is worth just over $1 billion, or close to $1.7 billion, including Georgia Gulf’s long term debt. Georgia Gulf’s expectations for EBITDA (earnings before interest, taxes, depreciation, and amortization) for 2011 are between $245 million and $255 million. This makes the offer seem a little cheap. However, Georgia Gulf’s book value (equity less intangibles and goodwill) is about $243 million.
2) Georgia Gulf has been through heck and back. It bought building products maker Royal Group technologies for $1.6 billion in 2006. Congratulations if you recognize that this was the worst possible time for a company to increase its exposure to the housing market. The downturn didn’t bankrupt Georgia Gulf, but it came close. The company almost got delisted from NYSE when its market cap slipped under $75 million. It needed time from creditors for payments due. Moreover, a debt for equity swap amounted to a quasi-bankruptcy: shareholders were diluted, though not completely wiped out.
3) Strategically, this is a no-brainer for Westlake. Both are integrated chloro-vinyl companies. Westlake is integrated back into ethylene; Georgia Gulf isn’t. Both make fabricated products, with Westlake’s business oriented towards pipe and Georgia Gulf leaning towards window and door profiles. Westlake also makes polyethylene. Georgia Gulf has a cumene/phenol business.
4) Expect more to come. I would have to think that Westlake will follow with a tender offer. And given that the stock is trading at above $30 per share, I would expect to see Westlake sweeten the deal somewhat. I’m not terribly sure if the bid makes it into the courts or to a proxy fight.
5) Georgia Gulf is preparing a defense. Westlake already owns about 4.8% of Georgia Gulf. A poison pill, in the form of a rights offering to Georgia Gulf shareholders, will prevent Westlake from owning more than 10%.
6) Georgia Gulf had a staggered board until 2010. A staggered board means that not all of the directors are up for reelection every year. Now, Georgia Gulf directors are up for election when their term ends. By my reckoning, Georgia Gulf has five of its eight directors up for reelection later this year. Three will serve until 2013. This might present an opportunity for Westlake to stack the board, depending on the nomination process.
7) I wouldn’t be surprised to see competing bidders. The last big takeover drama in the industry was Air Products’ run at Airgas. There were few potential suitors for Airgas. There may be more for Georgia Gulf. Mexichem comes to mind. It is trying to buy Wavin, Europe’s largest producer of plastic pipe for about $650 million. Why not drop that and string together a Georgia Gulf bid? Braskem also comes to mind. It is the big wheel in Brazilian chloro-vinyls and has been acquisitive in recent years in the U.S., buying both Dow’s and Sunoco’s polypropylene business.
8) There are echoes of Air Products/Airgas in Westlake’s bid. Both Airgas and Georgia Gulf called their unsolicited bids opportunist attempts to take advantage of share prices that were temporarily in the cellar. Both Air Products and Westlake responded that with their offers, shareholders of the target companies wouldn’t have to wait for fortunes to turn around to see a payday. Nearly a year ago, Air Products was forced to drop its $70 bid. Now Airgas is trading at above $80 per share.
9) One has to concede the first riposte to Georgia Gulf. Shares were worth more than $40 last year before the grumblings over European debt last summer. Georgia Gulf had been on the upswing in recent months. Westlake seems to be acting now before its opportunity slips away.
Carnegie Hall sits on the corner of 7th Ave. and 56th St. in Manhattan. How does one get there? Well, as the old adage goes, practice. (The Chemical Notebook took X1 express bus from Staten Island.) Nothing quite says “making it” in music like playing Carnegie Hall for the first time.
Something similar happened yesterday, only a couple of blocks away, at the Time Warner Center on Columbus Circle. Three startup firms held a joint press conference with the biggest brand name of them call, The Coca Cola Company, to announce a collaboration in what has become one of the biggest challenges of the plastics industry: a wholly renewable polyethylene terephthalate bottle. The three firms were Gevo, Virent, and Avantium. (I’m abusing the term “startup” a little bit by lumping Avantium in because, as chemists know, Avantium is a well-established name in high-throughput screening.)
Coca-Cola has had a PlantBottle on the market since 2009. The bottle is made from polyethylene terephthalate, but it is a different kind of PET. PET is made via the condensation of ethylene glycol with purified terephthalic acid. The PET in the plant bottle uses bio-based ethylene glycol (EG) instead of petrochemical-based EG. As a result, the plant bottle is 30% renewable.
Not to denigrate the PlantBottle, but the chemistry to get to bio-EG is straight forward: dehydrate ethanol to get ethylene and then convert ethylene into EO/EG via conventional routes.
The other 70% to go to a 100% bottle is a different matter altogether. Making PTA–or its common petrochemical precursor, paraxylene, hasn’t yielded to biology too easily. These are far more complex molecules. More work needs to be done before such a route can be commercially viable: Hence, yesterday’s event.
“We understand we can’t do it alone,” noted Rick Frazier, Coke’s VP of commercial market supply. “We need to work with partners.” He said Coke vetted about 30 companies with possible solutions. The three firms he shared the dais with were the ones that made the cut.
The three companies have very different routes to bio-based PET.
Virent has a catalytic process to turn sugars in a range of hydrocarbons, including PX.
Gevo ferments sugar into isobutanol, which after subsequent chemical reactions, is transformed into PX. Its technology is easily retrofitted into existing ethanol plants. Cheap ethanol plants are plentiful.
Avantium is the oddball of the bunch. It uses a catalytic process to turn sugar into furan dicarboxylic acid. This is condensed with ethylene glycol to make polyethylene furanoate. This is a polyester that, according to the Avantium, exceeds PET in terms of oxygen barrier and temperature performance. The polymer might seem like a natural for hot fill containers or beer. I suspect that if the collaboration is successful, we’ll see Avantium’s polymer in juice bottles or smaller soda bottles.
At the conference, The Chemical Notebook noted, in a question, that the collaboration felt like a competition. The Chemical Notebook is kind of a jerk and wanted to see the firms start sniping at each other. Conflict makes for a better story.
They were all very civil. Each of the company executives noted that the PET market was plenty big for all of them and that working with Coke was quite the coup, no matter how you look at it. “We are all the winners,” said Virent CEO Lee Edwards. “We are all here with the Coca Cola Company.” Frazier noted the company was also looking for a diversity of supply of bio-based PET.
That’s all very true. The market for PET in North America alone is roughly 10 billion lb. By the time these firms start knocking heads—perhaps a decade from now–bio-PET will be a commodity (even RC will use it) and no one will care anymore.
The conference was a little thin on details. For instance, I wanted to know more about the financial underpinnings. Was Coke taking equity stakes in the companies? Were there milestone payments? Other than assurances that Coke was putting its money where its mouth is, we got none of that. (I’ll watch Gevo’s SEC filings in case there’s a mention.)
Reporters wanted to hear more about its future ethylene glycol plans. We were told to stay tuned. I was curious about the polypropylene caps and labels. That’s a goal, Frazier said, but not a near-term one.
The time line for the bottles isn’t clear. For now, Coke is saying it wants all of its packaging to be renewable by 2020. Frazier mentioned 2015 as a date for a possible rollout, but he wouldn’t commit to it.