New Value-Added
Products from Soybeans
Opportunities for
North American Soybeans
1
May 2004
Un8ited Soybean Board
“The stone age did not end
because we ran out of
stones.” -Unknown
2
May 2004
Un8ited Soybean Board
1996
Anything you can make out of
petroleum, you can make out of
soybeans…
except money
2006
Well maybe…
September 15 2006
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3
World Soy Production 1990
100.5 Million Metric Tons
US
49%
Brazil
15%
Argentina
11%
Other
25%
September 15 2006
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World Soy Production 2005
217 Million Metric Tons
Canada
1.4%
US
39.4%
Brazil
24.4%
Paraguay
1.8%
Other
4.0% India
2.8%
September 15 2006
Argentina
18.0%
China
8.3%
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North American Production &
Utilization
2005 Marketing Year
 Whole Soybean production 3.5 Billion Bushels
 Soybean crush 2 billion bushels
 Soybean Exports
0.9 billion bushels
 Carryover and other 0.6 billion bushels
September 15 2006
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What is in a Soybean?
40% protein
20% Oil
40%
Cellulosics and
Sugars
September 15 2006
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North American Soy Crushing
NA crushes 1.8-2 billion bushels or
54-60 million tons
 20-22 billion lbs of oil or about 2.8
billion gallons (10.6 billion liters.)
 43-48 million tons of soybean meal.
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September 15 2006
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What About Value

Old value ratios (typical)
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If whole beans were worth X, then oil was worth
2.0-2.2 X and meal is worth 0.9-1.0X. Example if
beans are worth $6/bu ($0.10/lb) then oil is worth
$0.22/lb and meal is worth $180/ton ($0.09/lb)
Oil value= $2.42 (35%)
Meal value= $4.41 (65%)
Return to crusher= $6.83/bu
Meal set demand, but oil made the margin.
September 15 2006
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What About Value

Recent value ratios (Summer 2006)
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If whole beans are worth X, then oil is worth 2.62.8 X and meal is worth 0.8 X. Example if beans
are worth $5.40/bu ($0.09/lb) then oil is worth
$0.26/lb and meal is worth $150/ton ($0.075/lb)
Oil value= $2.86 (44%)
Meal value= $3.68 (56%)
Return to crusher= $6.54/bu
Oil is now determining value and driving demand
September 15 2006
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NA Soybean Oil Consumption
USE
1995
2005
Food
95%
88%
Feed
~2%
~2%
3%
10%
Industrial
September 15 2006
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Soybean Oil Demand Drivers
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Food demand flat to down, due to lost share
(corn, canola), transfatty acid issue.
Feed use is incidental, up slightly with
increased crush.
Industrial use is small compared to food use,
but increasing rapidly due to biodiesel,
plastics and other industrial uses.
September 15 2006
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Soybean Meal Consumption
USE
1995
2005
Food
~ 4%
>8%
Feed
95%
90%
Industrial
<1%
~ 2%
September 15 2006
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Soybean Meal Demand Drivers
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Food demand is increasing significantly due
to soy dairy substitutes and concentrated
proteins, still relatively small compared to
feed.
Feed use is flat with increased crush.
Industrial use (coatings, adhesives) is
increasing but remains very small percentage
of total.
September 15 2006
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New Industrial Uses
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Biodiesel
Plastics
Lubricants
Paints, Coatings & Inks
Solvents
Adhesives
September 15 2006
Omni Tech International
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Price Changes – 1990 thru 2005
12/1/05- Soy Oil 21¢/lb. Crude $58.42/barrel Gas $13.03/MMBTU
6/16/06- Soy Oil 24.9¢/lb. Crude $70.20/barrel Gas $7.46/MMBTU
$140
$120
$100
$80
$60
$40
$20
Soybean Oil $/100 lbs
Natural Gas $/10 MMBTU
September 15 2006
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
$0
Crude Petroleum $/barrel
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Biodiesel
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Tax incentives and mandates in the US
should drive biodiesel production to 240
million gallons (912 million liters) in 2006
Up 320% from 2005
Equal to almost 9% of NA soybean oil
production.
September 15 2006
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Biodiesel Economics
Per gallon
Feedstock cost @$0.27/lb=
Other production
Plant gate
Less federal incentives
Before freight
Local spot petrodiesel*
Gross margin
$2.025
0.400
$2.425
-1.100
$1.325
2.055
$0.730
*Energy Management Institute 5/17/06 Memphis TN
September 15 2006
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PLASTICS/PLASTIC COMPOSITES
Market segments
Current
 Polyols for Polyurethane foams, films, molded
parts
 Plastic Composites
Emerging
 Thermoplastics
September 15 2006
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North American Polyurethane Demand
(millions lbs.)*
2000A
2002
2004*
PUR
6482
6393
6888
Polyol
3007
2956
3610
*2004 API End Use Survey
September 15 2006
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Polyols & Intermediate Prices
2001 – December, 2005 Cents per Pound
120
100
80
60
40
20
0
2001
Soybean Oil
Propylene
September 15 2006
2002
2003
Flex poyol
Propylene Glycol
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2004
2005
Rigid Polyol
Propylene Oxide
21
Soy Polyols
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At least five different chemical modification
approaches
Range of costs and uses
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Molded foam
Slab foam
Carpet backing
RIM and SMC parts
UTT Carpet Mill- Dalton GA
September 15 2006
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Flexible Foam Seating
Cargill supplying Woodbridge in Ontario for
use by Ford
September 15 2006
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Target Area:
PLASTIC COMPOSITES
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Soy-based thermoset resin
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Polyester resin with fiberglass filler
Use by Ag Equipment manufacturers
Testing by auto makers
Polyurethanes
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Testing pultrusion of parts
Testing molding techniques and different fillers
September 15 2006
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Polyester Intermediate Prices
2001 – December, 2005 Cents per Pound
120
100
80
60
40
20
0
2001
2002
Soybean Oil
Maleic Anhydride
September 15 2006
2003
Benzene
Propylene Glycol
Omni Tech International
2004
2005
Ethylene
25
Lubricants
Soy Oil versus Petroleum Basestocks
Soy Oil Advantages
 Better lubricity
 Lower volatility
 Better viscosity index
Soy Oil Disadvantages
 Poor oxidative stability
 Poor low temperature properties
September 15 2006
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Lubricant Basestock Prices
2001 thru October, 2005 Cents per Pound
50
45
40
35
30
25
20
15
10
5
0
2001
2002
Soybean Oil
Group II+
September 15 2006
2003
Group I
Group III
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2004
2005
Group II
27
LUBRICANTS &
HYDRAULIC FLUIDS
Current
 Total loss applications
 2-cycle engine oil
 Some hydraulic fluids
 Transformer fluids
 Metal working
 Mold release and other industrial
September 15 2006
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LUBRICANTS &
HYDRAULIC FLUIDS
Researching
 Crankcase oil development at Valvoline
 Hydraulic fluid formulation at Afton (Ethyl
Corporation)
September 15 2006
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Paints, Coatings & Inks
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Traditionally largest industrial market for
soybean oil.
Alkyd resins declining with decline of oil
based paint.
Soy ink growing as price is
more competitive.
September 15 2006
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30
Paints, Coatings & Inks
Research
 Water based (latex) paints
 Powder coatings
 UV cured inks.
September 15 2006
Omni Tech International
31
Latex Coatings Intermediate Prices
2001 – December, 2005 Cents per Pound
120
100
80
60
40
20
0
2001
2002
Soybean oil
September 15 2006
2003
Vinyl Acetate
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2004
2005
Acrylic Acid
32
Powder Coatings Intermediate Prices
2001 – December, 2005 Cents per Pound
140
120
100
80
60
40
20
0
2001
Soybean oil
Styrene
September 15 2006
2002
2003
Maleic Anhydride
Propylene
Omni Tech International
2004
2005
Propylene Glycol
33
Solvents
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Primarily Soy methyl esters
Same as biodiesel with slightly different
standard.
New compounds in development.
September 15 2006
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34
Solvent Prices
2001 thru October, 2005 Cents per Pound
200
180
160
140
120
100
80
60
40
20
0
2001
2002
Methyl Soyate
Mineral Spirits
September 15 2006
2003
MEK
Methanol
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2004
2005
TCE
d'Limonene
35
SOLVENT MARKET
APPLICATIONS
COMMERCIAL
 Parts cleaners & degreasers
 Hard surface cleaners
 Stainless steel equipment
cleaners (Restaurants)
 Printing ink cleaners
 Paint strippers
 Adhesives removers
 Mastic removers
 Graffiti removers
 Asphalt cleaners & release
agents
 Concrete & wood stains
September 15 2006
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Hand cleaners
Hand lotions
Oil spill remediation
Corrosion protectants
Oil field equipment cleaners
Plant floor cleaners
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36
APPLICATIONS IN DEVELOPMENT
SME:
 Plastic waste disposal &
reuse
 Highway paving & patching
materials
 Pesticide carriers (mosquito
larvicides)
 Mold & mildewcides
 Paper pulp recycling
 Alkyd coating carriers
 Stationary engine fuels
(hydrogen)
September 15 2006
Soy Oil:
 Bioremediation (soil &
groundwater)
 Metalworking fluids
 Emollients (personal care
products)
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ADHESIVES
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Primary market: Wood
Adhesives
Based on soy flour or
protein concentrates
Recently launched new use
in interior grade plywood
Limited packaging adhesives based on
soybean oil.
September 15 2006
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Adhesives Intermediate Prices
2001 – December, 2005 Cents per Pound
70
60
50
40
30
20
10
0
2001
2002
Soybean Meal
September 15 2006
2003
Urea
Phenol
Omni Tech International
2004
2005
Formaldehyde
39
ADHESIVES
Research
 Improve water resistance to allow exterior
plywood use
 Lower viscosity to allow use
in oriented strandboard
September 15 2006
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Fermentation Research
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Produce ethanol from carbohydrates in
soybean meal
Real goal is a lower cost protein concentrate
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70% protein
No indigestible sugars/anti-nutritionals
Improved storage properties.
September 15 2006
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Thank You
Any Questions?
www.omnitechintl.com
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