Could you provide an overview of Stepan’s presence in APAC?

Our journey in Asia began in 1994 when we started supplying anionic surfactants as part of a JV in the Philippines. By 1996, we had completed the construction of our plant in Batangas, adding more capabilities along the way. Later in 2009, we incorporated Stepan Asia Private Limited in Singapore, and we acquired the manufacturing assets of Peter Cremer on Jurong Island in 2010. The Jurong Island plant produces fractionated methyl esters. We have an esterification capacity of 100,000 t/y, and a fractionation capacity of 50,000 t/y that is expandable to 100,000 t/y. The entire unit is Halal and Kosher certified. Though the Philippine plant started with anionic surfactants for the laundry market, Stepan is now also producing esterquats (EQ) used mostly in fabric softeners. Our sulfonation unit has an annual capacity of 40,000 t/y, and our EQ unit is about 18,000 t/y. Moreover, we have diversified our product offerings to other markets through the addition of two multipurpose reactors with a total capacity of 12,000 t/y.

What have been the main developments at Stepan Company in the last 1-2 years?

Stepan has seen good growth, and the last two years have been eventful not only from the perspective of managing through a pandemic, but also managing through organic and inorganic expansions. In one of our largest acquisitions to date, Stepan bought Invista’s aromatic polyester polyol business with two new sites in the Netherlands and the US. Secondly, we announced our decision to expand our alkoxylation production and invest in a new Pasadena, Texas, US, facility. The US$220 million investment will create an additional capacity of 75,000 t/y for ethoxylation and propoxylation. At the same time, we have been very focused on our sustainability initiatives and partnerships, and this year we are proud to have been awarded the EcoVadis Gold certification that places us in the top 6% of the chemical industry. Finally, one of our main next-generation growth platforms will be biosurfactants.

Could you elaborate on Stepan’s investments in biosurfactants?

Stepan has tapped into the production technologies for biosurfactants by investing in a surfactants tech company, NatSurFact. Low yields, often below 20%, represent the biggest challenge of biosurfactant production, but this is something we are keen to overcome. Last year we made another strong commitment to this growing market by acquiring a fermentation manufacturing facility with the potential to produce 20,000 t/y. This new production site is located in Lake Providence, Louisiana, US. We are putting together the building blocks — research and development, process technology, production and product/formulation knowledge — and stepping firmly into the biosurfactants market.

What are the main demand trends you observe in the surfactants market?

Within the consumer market, which covers home care and personal care, but also industrial and institutional markets, we see a strong preference for everything natural and minimalist. People seek formulations that are biodegradable, plant-based, and gentle to the skin and to the environment. Out of concern for the environment, consumers are asking for waterless formulations, going back in time to when powder detergent and solid soaps were the norm. Biodegradability is another big trend, especially when it comes to hair conditioners or moisturizers. Such trends have inspired us to rethink our formulations, making sure we combine a greener profile with high-level efficiency. Our portfolio includes natural emollients made from vegetable oils, as well as a suite of milder, less water-intensive, and biodegradable solutions.

Within the agricultural business, we note a growing interest in biological alternatives. For instance, bio-based solutions can replace synthetic or traditional chemical pesticides. Another way to reduce the chemical intensity of agricultural products is through precision agriculture technologies. Drones have become incredibly popular in China, proving much more effective than farmers in delivering exactly the quantity of pesticides required, all while protecting the farmer from exposure to harmful chemicals. Finally, the use of adjuvants has become more popular. Used together with active ingredients, adjuvants improve the spreadability, solubility and overall performance of an active substance. By combining more adjuvants, fewer pesticide actives are required to deliver the same performance.

How is Stepan driving sustainability at a regional level in Singapore?

Our plant on Jurong Island has received a sustainability award in recognition for our efforts to reduce energy consumption, and we are currently looking at ways to also reduce water usage within our production and procurement processes. Even though the carbon tax in Singapore only affects emitters with more than 25,000 t/y in Scope 1 emissions, of which we fall well below of, we put more effort into Scope 2 emissions associated with steam and electricity use. Globally, we have a target of allocating 80% of our R&D budget toward sustainably advantaged products and processes by 2023, and every product that comes through our innovation pipeline is assessed based on its sustainability profile. To make sure we align with the expectations of our customers, Stepan developed the Biorenewable Carbon Index which calculates the percentage of carbon derived from biorenewable resources. Stepan offers a broad range of products with greater than 50% biorenewable carbon.

What are your main goals for the next 1-2 years?

Our first priority is to deliver our strategic capital projects, starting with the start-up of our US alkoxylation facility by 2023. We also want to meet all milestones on the scale up and commercialization of our new biosurfactants product line. Finally, I would like to see more investments in Singapore to expand on our well-established platform and continue our growth story in Asia in support of our current and future customers.