Elevance Renewable Sciences K Lynne Johnson Cleantech Forum New York, October 2010
Company Overview WHAT WE DO Elevance Renewable Sciences Inc. is the leader in the chemical conversion of renewable feedstock into a wide range of both drop in and novel specialty chemicals TECHNOLOGY Elevance produces a wide range of specialty chemicals from renewable oils using proprietary, Nobel prize winning metathesis technology developed by Dr. Robert Grubbs COMMERCIAL PRODUCTION Already commercialized, marketed and generated gross profits from its first suite of commercial products; Asia joint venture in place with Wilmar Current Run Rate Production: 13,000 Mt 2013 Projected Production: 840,000 Mt KEY STATS Employees: 60 Founded: 2007 Headquarters: Bolingbrook, IL 2
Key Points of Differentiation Novel, proven proprietary technology that is feedstock flexible Profitable commercial sales today; Established commercial Joint Venture Strategic partnerships accelerate access to large, existing end markets Nobel prize winning chemical catalysis technology Manufacturing process is proven, running at scale today utilizing multiple sustainable feedstocks Agreement signed in 2010 with Wilmar for commercial biorefinery Attractive unit level economics deliver drop in substitution that is cost and performance competitive Unique product attributes enable premium pricing into several market channels Strategic partnerships with key players in the value chain already established, others well advanced 3
Commercial Disruptive Technology Low Costs Multi source, low cost feedstocks Direct route to specialty chemicals Low energy intensity operating conditions Scale economies Low Capital Direct conversion route limits processing steps Co locate with synergistic manufacturing facilities Retrofit of existing biodiesel assets High Value Platform technology allows conversion into chemical building blocks Coveted product properties in several applications The only commercial technology that creates both direct replacement and new higher performance replacements with compelling economic returns 4 2010 Elevance Renewable Sciences.
Replacement of Traditional Petroleum Based Feedstock Petroleum Feedstock Conventional Petrochemical Infrastructure Complex Downstream Processing Petrochemicals require tremendous infrastructure and processing steps Billions are invested to produce a simple olefin, ethylene, H2C=CH2 Petrochemicals react the olefin to produce a diverse set of more complex products Ethylene derivatives may be sold or subsequently reacted to build additional complexity Renewable Feedstock Elevance Metathesis Catalyst Elegant Conversion Process Biochemicals use simple technology to unlock nature s complexity Natural oils already contain desired reactive olefins Metathesis enables the breaking of the complex molecule into simple fragments and recombining into desired products at ambient conditions Product options include wax, alpha olefins, acids / esters, epoxides, aldehydes, alcohols 5
Elevance Biorefinery Refinery scale drives economics; chemicals derivatives enhance sustainability and flexibility Repurposes or integrates into existing industry infrastructure driving low capital costs Olefins Olefins Co Reactants Bio Oil Metathesis Distillation Derivatization/ Separations Specialty Chemicals Process step Esters Trans Esterification Distillation Inputs Products Alcohol Hydrolysis / Hydrogenation Oleochemicals Asia South America North America Capital Cost 360Kmt ($ millions) $30 $60 $75 6
Wilmar Elevance Joint Venture Significant Existing Infrastructure Feedstock Capital Off Take Technology Capital Off Take Utilities, storage and other infrastructure Jetty Joint venture for world s largest biochemical refinery (initial size of 180 Kmt in 2011, expandable to 360 Kmt in 2014) Processing equipment 7
Uniquely Positioned to Access Value From All Oil Feedstocks Renewable oil feedstocks provide significant advantages Available at industrial scale in all regions Liquid form enables simple, low cost transportation & storage Canola Mustard Soy Algae Rapeseed Olive Algae Palm Rapeseed Jatropha Mustard Higher levels of unsaturation produce the greatest volumes of high margin products Strategic partnerships with large suppliers enable security and diversity of supply Feedstock flexibility between two oils has ability to deliver 5 12% in further cost optimization Mustard Canola Flaxseed Safflower Sunflower Camelina Corn Soybean Olive Peanut Jatropha Cottonseed Chicken Fat Algae Lard Beef Tallow Palm Butterfat Coconut 7 18 14 16 34 29 23 2 19 28 28 39 Soy Palm Monounsaturated Polyunsaturated Saturated 48 46 50 47 49 61 4 71 75 10 54 39 73 76 72 54 58 62 10 3 91 20 33 32 68 22 7 32 7 9 10 12 12 13 15 10 15 19 22 27 30 33 43 48 51 0% 20% 40% 60% 80% 100% Sources: North Dakota State University; Jatropha data from Jumat Salimon and Rozaini Abdullah; Mustard data from K S Oils, Ltd. 8
Large and Existing End Markets Growth with Drivers for New Solutions Consumer Ingredients & Intermediates Detergents & Cleaners Performance Waxes & Candles Personal Care Products Antimicrobials Personal Care Preservatives Ag Insecticides & Fungicides Consumer & Industrial Biocides Lubricants, Additives & Fuels Lubricant Base Oils Lubricant & Fuels Additives Advanced Bio Fuels $105 Billion $13 Billion $50 Billion 9
Market Entry Strategy 100% 90% Capacity 80% 70% 60% 50% 40% 30% 20% 10% 0% Petrochemical Substitutes Time Premium Alternatives Specialty Chemicals Petrochemical Substitutes Premium Alternatives Specialty Chemicals Provides Profitable Baseload Enhanced Profitability Maximize Profitability Requires Qualification Performance Testing Development Replacing Chemical Equivalents Similar Products Lower performing or higher cost alternatives Key Metric Meeting Spec Tighter Specs or Process Economics Demonstrating performance & economics Development Cycle 3 6 months 6 18 months 12 36 months (can be up to 60) 10
Strategic Partnerships Accelerate Entry into Large Existing Markets Large End Markets Penetration Accelerated via Partnerships Partnership Benefits: Global partners have assets and capabilities that complement and rapidly extend Elevance s skills and capabilities Increased access to available customers Allows Elevance to maximize value capture of high value Specialty Products Consumer Ingredients & Intermediates Antimicrobials Lubricants, Additives & Fuels Partnership example: Manufacture Specialty Consumer Ingredients and Intermediates $105 Billion $13 Billion $50 Billion Leading Developer and Supplier to the Personal Care Industry Strong fundamental market openings/drivers Not dependent on dynamics of a single market Both near and longer term growth opportunities Specialty Personal Care Retailer 11
Flexible and High Return Business Model Accelerates Growth Asset Repurposing Elevance technology may be deployed within existing biodiesel, chemical and oleochemical facilities enabling significant upgrade in product value from underperforming assets Gal in Mil Plant Production (Million GPY) North America #2 Q3 2014 South America #1 Q3 2013 Asia #2 Q1 2013 North America #1 Q3 2012 Asia #1 May 2011 On Purpose Mfg 2010 2011 2012 2013 2014 Joint Ventures On Purpose / Toll Manufacturing JV agreements efficient access to significant existing infrastructure and partner expertise for feedstock sourcing and marketing of certain of its products Elevance benefits today from under utilized toll manufacturing capacity; Our existing portfolio of contract and batch manufacturing options enable a flexible and scalable commercial operation 12
Investment Highlights Proprietary, Disruptive Technology Platform Generating Gross Profits Today Commercialization Further Enhanced By Wilmar Joint Venture Attractive Low Capital And High Margin Business Drives Compelling Unit Level Economics Flexible and High Return Business Model Accelerates Global Growth Renewable Feedstock Flexibility Large And Existing End Markets Accessible Through Strategic Partnerships Delivering Exceptional Economic Returns and Enabling a Multibillion Dollar Specialty Chemical Business 13
Thank you. 14 2008 Copyright, Elevance