DSM’s Innovative Power: Adapting To The Future Through Co-innovation

By: Gianluigi Cuccureddu

DSM has recently been in the news twice. One occassion due the launch of an open innovation contest that challenges designers and creative thinkers to develop high-quality sports equipment using the company’s own Arnitel® Eco material. The other occassion because the American ethanol producer POET and DSM announced a joint venture to demonstrate commercial cellulosic bio-ethanol production and license the technology by 2013. On top of this news, Deloitte and VNCI published a report on the state of the chemical industry in the Netherlands where DSM is headquartered.

Open innovation challenge

The Daily Crowdsource reports additionally on the Artinel Eco material:

A thermoplastic co-polyester (TPC) partially made from renewable resources, Arnitel Eco is a resistant and elastic material which has applications in the automotive industry, sports, furniture, alternative energy and consumer electronics. What makes it so good for sports products is its high flexibility and fatigue resistance. It can easily outperform conventional rubbers.

The challenge is organized in collaboration with InnoPass and ideaken, and is open to everyone and anyone who would like to participate. If people are interested, they can sign up here and submit until March 1st.

POET and DSM’s joint venture

Both companies will hold a 50 percent share in the joint venture which will be headquartered in Sioux Falls. Environment News Service reports:

“Starting in the second half of 2013, POET-DSM Advanced Biofuels, LLC will produce cellulosic ethanol from corn crop residue through a biological process using enzymatic hydrolysis followed by fermentation. The residue consists of the cobs, leaves, husks and some stalk left in the field after the corn is harvested. The joint venture is expected to be profitable in 2014, the first full year of production, and to deliver substantial revenues in the longer term, the executives said Monday.”

Jeff Broin, POET founder and CEO, said:

“This joint venture brings together two companies leading the transition from a fossil-based economy to a bio-based economy. The partnership has set an ambitious goal, to make cellulosic bio-ethanol competitive with corn ethanol, which is the most competitive liquid transportation fuel on the market today. We believe that the joint venture positions us well to meet our ambitious cellulosic ethanol production goals.”

Feike Sijbesma, DSM CEO and chairman of the DSM Managing Board, said:

“This cooperation is a milestone in realizing DSM’s strategy. By leveraging the unique opportunities in life sciences and materials sciences we can contribute our heritage of over a century in both biotechnology and chemistry to this joint venture with a biofuels leader. Together we shall deliver the key to unlock the cellulosic bio-ethanol opportunity.

As the world is facing unprecedented challenges with a growing population making an ever bigger claim on the planet’s resources, we need to accelerate the transition to a bio-based economy and this joint venture is a significant step in that direction.”

 The chemical industry in the Netherlands

The report “ The Chemical Industry in the Netherlands:World leading today andin 2030–2050” can be downloaded here after filling in some details.

The key takeaway for 2030-2050 as stated in the report (page 5) is:

The northwest European region will increase its strength in innovation, cooperation, and specialization. It will be active in production across the value chain and in end markets that include fossil and bio-based feedstock. This trend will enable the chemical industry to continue as a leading sector in generating wealth and jobs in the Netherlands.

Although the world may take various turns at critical junctures in the future, the Netherlands chemical industry will be able to adapt to economic, demo­graphic, and technological trends through to 2050.

The chemical industry of the Netherlands has four key characteristics (see Figure 1 on page 6):

1.  A tightly integrated network of large and small plants, pipelines, suppliers, and end users across northwest Europe.
2. The flexibility to use a wide range of feedstock.
3. The cornerstone position in a leading innovation ecosystem.
4. A clear regulatory framework.

To realize this potential, the industry must build and expand on its current strengths which can be read from page 6 to 9.

The chemical industry will increasingly be seen as innovative, clean and safe and as a vital industry that creates products that decreases the negative impact on health and the global environment, one way of doing so is by strengthening its innovation, cooperation (or should this be collaboration?) and specialization capabilities as mentioned in the report.

Co-innovation can also go beyond the industry boundaries to develop competitive advantages and capabilities:

“Mohan Sawhney and Iῆigo Arroniz that found that companies within an industry tend to adopt similar approaches to innovation. When you look at it, manufacturing firms tend to focus on new technology; chemical companies tend to focus on process improvements; consumer products firms tend to focus on distribution and branding innovations; financial firms tend to focus on developing new services and customer experiences. So for a company to differentiate, it needs to absorb lessons from other industries and other parts of the world so that they can see things differently and develop a distinctive competitive approach.”

What do you think of the undertaken efforts and actions by the chemical industry and its players?

By Gianluigi Cuccureddu