Making Waves

Dubbed the 'third wave' of biotechnology, after medicine and agriculture, industrial biotechnology is promising to reshape manufacturing.

Brent Erickson looks like an unlikely matchmaker. He also does not appear to be the man to spearhead the next revolution in U.S. manufacturing. Bearded, scholarly and eminently accessible, he is the wrong gender to be a traditional couple-maker and the wrong temperament to yield the same long-standing influence as an industrial titan such as Henry Ford. But Erickson is someone U.S. manufacturing executives should get to know. For indeed his modus operendi as vice president of the Industrial and Environmental Section of the Biotechnology Industry Organization (BIO) is to introduce traditional manufacturers to the emerging world of industrial biotechnology. This movement, dubbed "the third wave" of biotechnology in the United States and "white biotechnology" in Europe, is increasingly seen as being as influential, if not more influential, to the future of manufacturing as the Internet. It is infiltrating a wide range of industries -- chemicals, autos, plastics, consumer products, textiles, paper, pharmaceuticals -- and is bringing change to all phases of production, from inputs to finished goods to pollution control to packaging. "We're at the base of a mountain," futurist and author Daniel Burrus told the nearly 500 attendees at the first World Congress on Industrial Biotechnology and Bioprocessing in Orlando in April, which drew scientists and manufacturing executives from around the world. "We are going to redefine multiple industries, without question. I can put my reputation on the line and say it will happen." Erickson described it this way in a recent letter that accompanied a research report on biotechnology's potential in manufacturing: "We are witnessing the creation of a new infrastructure based on biology instead of old rust belt technology and petroleum." Industrial biotechnology refers to the application of scientific and engineering principles to the processing of materials by biological agents to provide goods and services. The processing could involve replacing less-desirable inputs such as petroleum with carbohydrate-based inputs such as corn to make actual products, i.e., ethanol. Or, the processing could involve using cells to manufacture something, such as using a fermentation process to make an enzyme that can replace a more caustic synthetic chemical mixture. Frequently the result is a marketable product that is manufactured at a lower cost and with less environmental impact. This happened, for instance, in the 1970s when manufacturers of laundry detergents started to replace polluting phosphates with cell-derived enzymes, which reduced undesirable waste, improved the product (the enzymes removed stains better) and literally shrunk the size of the product, which saved on transportation and packaging costs. Enzymes and cell-based processes have been used to produce such ancient products as wine, beer and cheese and more recently contact lens cleaners and meat tenderizers. But these applications have been sporadic and limited. Today, widespread biology-based product reengineering is occurring in the making of packaging, vitamins, clothing, auto parts, drugs and other goods at a faster-than-ever rate because of bioinformatics, the application of super-computing techniques to biology. It's the same technology that opened the door for the mapping of the human genome. Simultaneously, industrial biotechnology is being stalled by several factors: public aversion to genetic engineering, lack of capital and general ignorance of the technology. "In many cases, the biocatalysts or whole-cell processes are so new that many chemical engineers and product-development specialists are not yet aware that they are available for deployment," states BIO's report, "New Biotech Tools For A Cleaner Environment," released in June by the Washington, D.C.-based trade group. "This is a good example of a 'technology gap' where there is a lag between availability and widespread use of a new technology." Yet, experts say industrial biotechnology has the potential to create new industries and new products, and produce cost savings equal to or greater than the massive savings manufacturers have gained from forces such as lean manufacturing and information technology. "In effect, there is a megatrend developing where we are beginning to move to a bio-economy," explains Erickson. "Henry Ford toyed with the idea of using soy bean-based plastics for car body parts, and George Washington Carver invented hundreds of products made from agricultural feedstocks. They were two early visionaries who saw the potential in using renewable feedstocks, but they did not have the three mega biotech-power tools we have at our disposal today -- genomics, proteomics and bioinformatics. These tools are enabling this new industrial revolution, and companies that don't get in the game early are likely to loose their competitive edge over the next five to 10 years." Growing No-Growth Industries Case studies are showing that industrial biotechnology can spur new-product development in the most mature of industries. In the global chemical industry, for instance, 5% of current sales rely on biotechnology processes, according to Jens Riese, a consultant with McKinsey & Co. McKinsey estimates that within the next six years, that will at least double and could reach 20% depending upon such factors as plant feedstock prices and investment level. Some of the world's largest chemical companies such as Degussa AG, DSM NV, Dow Chemical Co. and Du Pont & Co. are players in this field, with products already on the market. Additionally, companies such as Eastman Chemical Co. and Procter & Gamble Co. are establishing biotechnology units. "Biotech has made it to the CEO level" in the chemical industry, Riese says. "They see biotech as a key to competing against Asia and for innovation." Riese is cautious in his assessment of when biotech will become omnipresent in the chemical industry, saying many hurdles must be cleared, but he notes that this technology is all about speed -- new product development requires weeks, not years as some traditional chemical development has required. "We've gone a long way up the learning curve, but it's getting faster. If we look in the past decade, there are not many new polymers that have been introduced. The hope with industrial biotechnology is that it can build on the building blocks we already have to create new products." Indeed, Du Pont has developed a carbohydrate-derived version of its material Sorona, developed in conjunction with Genencor International, that can be used for clothing, carpeting and packaging. DuPont has a plant in Kinston, N.C. that makes a petrochemical-based building block (propanediol or PDO) for Sorona but is constructing a plant that will make PDO using a fermentation process. That plant-based process uses less energy and produces fewer emissions than the petroleum-based process. A pioneer in the industrialization of biotechnology has been Cargill Dow LLA, Minnetonka, Minn., a joint-venture company formed in 1997 that has been producing NatureWorks PLA (polylactide) at a Blair, Neb., plant since 2002. This material is being used by manufacturers such as packaging materials maker Ex-Tech Plastics Inc., Richmond, Ill. Privately-held Ex-Tech serves the thermoformed packaging market with petroleum-based PVC and polypropylene for food and other applications. In October 2003, the company started extruding sheet and roll stock from NatureWorks PLA in a variety of gauges. It began working with Cargill Dow because of growing demand for renewable packaging. NatureWorks PLA-derived containers, for instance, are being increasingly used by natural-foods manufacturers and retailers in Europe, and last year, U.S.-based Wild Oats Markets Inc. started using deli containers made from NatureWorks PLA at one store and then extended their use to all of its 77 stores after a 4% increase in deli sales. "These early adopters are finding the packaging to be an effective marketing tool for generating department and item sales," says Lisa Owen, global business leader for rigid packaging for Cargill Dow. "Consumers seem to feel good about food inside a natural package, viewing the entire offering as more fresh and wholesome." Cargill Dow also markets fibers made from PLA for the textiles market under the Ingeo trademark and has promoted itself with t-shirts stating, "This shirt is made from corn." In addition to new product development and increased sales, industrial biotechnology has the potential to drastically reduce costs and pollution. A case in point: production of crude riboflavin, or vitamin B12, used as an ingredient in food, feed and other consumer packaged goods. Fermentation is replacing synthetic chemical production industrywide and for good reason. The biotechnology-based process has reduced hazardous waste by 66%, air emissions by 50% and costs by 50%, according to the Organization for Economic Development and Cooperation's 2001 report, "The Application of Biotechnology to Industrial Sustainability." Not surprisingly, global market share of bio-processed riboflavin increased from 5% in 1990 to 75% in 2002. Among other things, switching to fermentation reduced what was a 10-step production process into a one-step production process, reducing energy demand by 20% and water usage by 75%. In another example, industrial enzyme manufacturer Novozymes North America, sells an enzyme that can be used by textile manufacturers in place of a chemical process to prepare cotton for dyeing and finishing. The benefits: Mills can cut water, chemical and energy demand for the process by 30% to 50%, and if the entire industry shifted to this process, it would cut water consumption alone by 45 million cubic meters annually, according to BIO. Anti-Bio Movement A Hurdle Despite the demonstrated evidence of bio-based manufacturing, several factors are blocking this wave. The most frustrating for its proponents is public opinion that these products and processes are harmful. That's why the movement has been dubbed "white biotechnology" in Europe, to distinguish it from genetically modified food products, which caused an uproar there when first introduced, and indeed are banned. Scientists in this field like to point out that there is no proof genetically modified foods are harmful, that genetic modification is not used in all bio-based process, and that genetically modified cells are sometimes used to produce things but are not part of the actual end products. Nonetheless, the spread of bio-based methods to the industrial world will meet resistance from those who believe it is harmful. "If it has the word 'bio' in it or the word 'tech' in it, you are already in trouble," says Burrus, the futurist and author of "Technotrends," (HarperBusiness, 1994). "Perception is reality, so we have to groom, using facts. Fear comes from ignorance." Additionally, funding is often a problem, both from the private and public sectors. Investing in a new manufacturing process and chain of suppliers is a huge commitment for a manufacturing company, and often the processes are not understood. "If you go back and talk to upper management about this technology, their eyes will glaze over," Burrus told the conference attendees. "What you have to focus on is where is their pain and how the technology can solve their problems." Competition could be a helper here, says McKinsey's Riese. The shrinking margins of the chemical industry in recent years, for example, forced management to learn more about industrial biotechnology. "Five years ago we could not get in to see management," says Riese. "That has dramatically changed. We are very often invited to speak." Are Governments On Board? Another concern of industrial biotechnology advocates is the lack of public funding and infrastructure needed to bring the benefits of these breakthroughs to fruition. For instance, in an ethanol versus gasoline comparison, ethanol comes out on top in terms of lower emissions, renewable raw materials and less dependence on foreign nations for key fuel. Still, ethanol remains a more expensive fuel to produce and deliver. It lacks the mature production, distribution and market acceptance that gasoline has. Some argue that tax revenues from gasoline should be used to subsidize the building of an ethanol industry in the United States. And, yes, it is a competitive issue, not just an environmental one. Indeed, Canada has partnered with Petro-Canada and Shell Global Solutions to help Iogen Corp., Ottawa, build the first cellulose ethanol plant (the cheaper, non-edible as opposed to edible parts of corn are used to make the fuel). Although the first plant, which started production in April, is a demonstration site, the company is planning other, full-scale plants that would sell to customers such as Petro-Canada. David Paterson, vice president of GM Canada, called the plant "a very significant product development that could make a considerable contribution to the reduction of greenhouse gas emissions." (All of GM's vehicles can run on a mix of 10% cellulose ethanol without modification.) "We are pleased to see a leading-edge Canadian company develop the next generation of ethanol," he said, "and we encourage its adoption in the marketplace."

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