10th Starch & Derivatives

Conference Geneva, April 10th, 2013

PROCEEDINGS PART II

Organisers

GIRACT 24, Pre Colomb

1290 Versoix/Geneve Switzerland

www.giract.com info@giract.com

Paper 4 _____________________________ _____________________________ _____________________________

STARCH DEMAND FOR THE PAPER & BOARD INDUSTRY AND IMPLICATIONS ON GLOBAL

SUPPLY CHAIN

JOHAN SCHRIJVER

TATE & LYLE

_____________________________ _____________________________ _____________________________

STARCH DEMAND FOR THE PAPER & BOARD INDUSTRY AND IMPLICATIONS ON GLOBAL SUPPLY CHAINS

Koen Homburg/Johan Schrijver, Tate & Lyle

10th Starch & Derivatives Conference

April 9/10, 2013.

Hotel Beau-Rivage

Geneva, Switzerland

2

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© Tate & Lyle 2010 2

José Manuel Durão Barroso

President of the European Commission

Statement (March 6th, 2013) by President Barroso

following his meeting with Ms Yingluck

Shinawatra, Prime Minister of Thailand

………. Secondly, I am delighted to announce, together with Prime Minister

Shinawatra, the launch of negotiations on a free trade

agreement between the European Union and Thailand. Our

bilateral trade amounted in 2011 to almost €30 billion, and the

EU is also a very important investor in Thailand; I am deeply

convinced that this Free Trade Agreement can bring substantial

benefits to our already strong trade and investment relations.

So, my message today is very clear: we are

entering a new era in our relations.

…….

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© Tate & Lyle 2010 3

Agenda

Tate & Lyle

Industrial Market Volumes

Food versus Industrial

Europe/global volumes

Industries Paper/Board

Corrugating/Construction

Value of starch application

Growth

Raw Materials

Supply Chain

Conclusion and challenges

Resources and support

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Tate & Lyle overview

4

Founded in the UK in the mid 19th century; Tate and Lyle businesses

merged to form Tate & Lyle in 1921

Headquarters in London and listed on London Stock Exchange:

− member of FTSE 100

− market capitalization of £3.6 billion

Business built on core values of safety, respect and integrity

Production facilities, laboratories and offices in over 30 countries

4,300 employees worldwide

Sales of £3.1 billion and operating profit of £323 million(1)

Customers include many of the world’s largest food and beverage

manufacturers, and industrial and pharmaceutical customers

(1) For financial year ended 31 March 2012

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Tate & Lyle’s strategy and operating model

5

Speciality Food

Ingredients

Bulk

Ingredients

Global business units

Shared business services and corporate functions

Global growth unit

Common IS/IT platform

Global support services

Global IS/IT

Innovation and Commercial Development

Customers

Operating Model Strategy

What:

The leading global provider of speciality food ingredients and solutions

How:

Disciplined focus on growing our Speciality Food Ingredients business:

– Innovation and agility

– Deeper customer understanding

– Stronger positions in high growth markets

Driving the Bulk Ingredients business for sustained cash generation to fuel this growth

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Bulk Ingredients

US

Sweeteners

EU

Sweeteners

Industrial

and other

• Corn sugars

• Dextrose

• Glucose

• Starches for paper and paperboard

• Acidulants/fermentation/bio-chemistry

• Corn co-products incl. animal feed

• Corn sugars

• Dextrose

• Glucose

Tate & Lyle’s ingredients portfolio

6

Speciality Food Ingredients

Starch-based

Speciality Ingredients

High Intensity

Sweeteners

Food

Systems

• Speciality starches

• Speciality sweeteners

• Soluble corn fibres

• Diary stabilizer systems

• “Bespoke” blending

• SPLENDA® Sucralose

• PUREFRUIT™ monk fruit extract

• TASTEVA™ Stevia Sweetener

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Tate & Lyle’s Innovation and Commercial Development

unit is a key driver of growth

7

Combines R&D, Open Innovation, Global Marketing and Platform

Management

Close collaboration with customers worldwide

Responsible for innovation pipeline and launch of new products

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Tate & Lyle’s global locations

8

© Tate & Lyle 2010 4/24/2013

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Tate & Lyle’s Values

9

Our Core Values form the foundation

on which our business has been built

over a hundred years.

Our Performance Values define

what we need to do to succeed

in business today.

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EU: Food versus Industrial starch based products

Different sources, AAF and

T&L calculations

Starch: Paper/board/packaging: 60% native, 40% modified

Native starch Industrial: >70% of all native starches

Modified Starch industrial: 68% of all modified starch.

2012: 8.9 million tons

58%24%

18%

Syrups/Blends

Native

ModifiedModified

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55%

17%1%

2%

2%

23%

Paper& Board

CorrugatingBoardTextile

Construction

Europe: Starch demand total by application

Total 4.5 million ton

Misc. sources: Giract,

CHAD, T&L

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Part 2 Growth in the Industrial starches Europe Total

Different sources, AAF and

T&L calculations

Paper/board/packaging: >70% of industrial

Chemicals and Bio: part syrups/sweeteners

0.000

1.000

2.000

3.000

4.000

5.000

6.000

2006 2010 2015 2020

in m

illi

on

to

ns

Other

Chemicals Bio

Construction

Corrugating board and adhesives

Paper and Board

AAF and T&L

calculations

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Global: Starch demand by application

Total 22-25 million ton

Giract and T&L

calculations

42%

34%

9%

15%

Food

Paper andBoard

CorrugatingBoard

Otherindustrial

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European Paper and Board by paper grade

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European Paper and Board Production

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Production versus consumption

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Paper & Board: global consumption

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18 © Tate & Lyle 2010

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Global: paper & board consumption per capita

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Starch consumption in the paper industry and expectation

• Global paper and board production is 400 million tons, so

(1.6%) of starch is needed 6.4 million tons of starch

To understand the growth in starch demand we have to

understand:

• Value of starch and development in the application

• Population and GDP development world wide

• Growth in paper and board production

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Value of starch: Properties of different native starches

4/24/2013

For all application in the paper industry, starch will be modified by

the starch supplier or paper mill and differences in these properties

will be reduced

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21

Industrial Applications Products by type and application

Application Type of product Function

Corrugation Crosslinked

Native

Glue-Carrier-

Viscosity

Wet-end Cationic Retention-

Strength

Surface Sizing Cationic

Dextrin

Native (Can be used for

Enzymatic or Thermo-

chemical conversion)

Surface

Properties

Printability

Strength

Coating Dextrin Binder

Construction

industry

Modified Native Binder

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Application of starch in Paper and Board Shares in volume en trends

• Surface sizing 60 % (↑)

Improving (surface) strength and prevent dusting

• Wet-end starch 22 % (↑)

Improving strength of the paper

• Coating 15% (↑↑)

Binder for pigments

• Spray starch 3% (↔)

Improvement of plybond

4/24/2013

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FOEX pulp and paper index 2nd of April 2013

Tuesdays 12:00

am 2.4.2013 Chg previous Chg beg year

Pulp NBSK USD USD 837.49 +0.47 +28.12

Pulp NBSK EUR EUR 654.03 +7.58 +40.08

Pulp BHKP EUR EUR 626.39 +7.48 +38.28

Pulp BHKP USD USD 802.09 +0.73 +26.78

Paper LWC EUR 671.86 +0.73 -16.70

Paper Ctd WF EUR 676.55 +0.26 -19.97

Paper A4 B-copy EUR 849.89 +0.54 -13.00

Paper Newsprint EUR 478.31 -0.27 -17.26

Kraftliner EUR 580.08 +0.28 -3.93

White-top

Kraftliner EUR 767.58 +1.15 -9.97

Testliner 2 EUR 441.83 +0.10 +15.74

Testliner 3 EUR 415.57 +0.39 +14.08

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Trends

• Paper industry is very much cost driven. Current over

capacity in Europe and high pulp prices are the main reasons.

• Use of more filler in the sheet increases the need for more

(cationic) wet-end and surface starch.

• Packaging companies tend to reduce basis weight of the

board. This increases the need for more surface starch to

keep stiffness and surface strength.

• In a coating formulation the latex is the most expensive

component. The petrol based binders are over 3 times more

expensive than starch. Modified starch can replace a part the

latex.

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• Strength is one of the most important

characteristics of paper. Not only in packaging

but also in tissue and fine paper.

• Paper makers have several options to increase

strength:

• Choice of fiber source (high cost impact!)

• Fiber treatment, refining (high energy cost)

• Level and source of filler

• Use of dry strength additives

Strength

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Dry strength

Organic: Dosage: Appl Cost

Starch (0,5-1,5% on paper) 3-9 €/t

Guar Gum (0,1-0,3% on paper) 6-18 €/t

CMC (0,3-0,5% on paper) 8- 12 €/t

Synthetic: (0,1-0,5% on paper) 15-25 €/t

PolyVinylamine

PAM (polyacrylamide)

PAE (poly aminoamide-eipchlorohydrin)

GPAM (cationic glyoxalated polyacrylamide)

4/24/2013

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Starch vs Synthetic Additives

• Natural binders such as starch are relatively cheap compared

to synthetic binders

• Beside strength additive and increases filler retention

• Starch add to stiffness of the paper

But….

• Starch needs expensive cooking equipment

• Starch can increase the COD level of the paper mill’s waste

water

• Starch increases the need for biocide, since it’s a nutritional

source for bacteria

• Cationic starch retention depends highly on salt level of the

process water (degree of water closure)

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Value proposition of starch as dry strength agent:

15 kg/ton cationic starch at 620 euro/ton

Dosage cost = 9 euro/ton

Typical strength increase 10-15%

Filler replacement:

cost of filler = 120 euro/ton

cost of pulp = 630 euro/ton

Increase in strength by 10-15 % can increase filler levels by 4-

5 %, the value of which is between 20-25 euro/ton paper

Reduce fiber by 3-4 %, the value of which is between 18-24

euro/ton paper

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Value proposition of starch as coating binder:

Latex cost 2000 euro/ton

Binder Starch cost 600 euro/ton

Latex can be replaced up to 30-50 % on total binder.

Total latex cost = 70 euro/ton paper

Latex replaced by starch:

30%- 50% = 12- 26 euro/ton paper

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Value proposition of starch corrugated board glue or Gypsum board

Corrugated board and Gypsum consist of 2-3% starch

Starch cost = 12-18 euro/ton corrugated

Synthetic alternatives = 30-60 euro/ton corrugated

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Conclusion Value

• The added value of starch in the paper industry is still almost

double the cost of starch. This counts for all applications in the

paper industry and alternatives.

• Since synthetic alternatives in the corrugated board are 3 times

more expensive, the added value of starch in this industry is

even higher.

• Starch will stay as a very important additive in the paper and

board industry and its share will most likely grow.

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Population and GDP development world wide

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33 © Tate & Lyle 2010

4/24/2013

IMF projection of GDP until 2016 for historical

top 10 GPD countries

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34 © Tate & Lyle 2010

4/24/2013

Example: main growth container board and Tissue

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35 © Tate & Lyle 2010

4/24/2013

Example: Tissue consumption world wide

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36 © Tate & Lyle 2010

4/24/2013

Example: Indian Paper and Board outlook

Poyry

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Expectation Global demand for industrial starches

• World population will grow by 3 billion people by 2040

• Paper and board consumption will likely stabilize between 75-100

kg/capita world wide in the coming 25 years

• World paper production and starch demand will grow strongly in

Asia and South America

• Paper consumption in the USA will drop significantly and the

consumption will stabilize at European level or slightly lower

• Only based on the extra 3 billion people , the paper and board

consumption will grow between 150 and 300 million tons, which

counts for 2.4 – 4.8 million tons of starch by 2040.

• Total demand for starch for the paper and board industry will be

between 10-12 million tons. (double consumption!)

• The corrugated board consumption will grow and stabilize on the

Western European level. This will give a consumption of maximum

0.7 kg starch/capita. Here the volume will increase by 2.5-4 million

tons of starch by 2040. The global starch consumption in corrugated

board industry will be between 5-7 million tons/a.

37 © Tate & Lyle 2010

4/24/2013

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World Corn Production vs Usage

39

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World Corn Stocks/ Ratio

40

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World Corn Yield

41

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Stocks to Use Ratio

14 %

12 %

24 %

22 %

14 %16 % 16 %

15 %

10 %9 %

6 %

0 %

5 %

10 %

15 %

20 %

25 %

02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13

US Corn - Stock to Use Ratio

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World Corn Production (all depends on the USA!)

The USA started the season with big hopes for a record crop, but yields dropped from 166 to 122 bu/ acre!

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US Corn Yield Trend

US Corn Yield

65.0

85.0

105.0

125.0

145.0

165.0

1971

-72

1973

-74

1975

-76

1977

-78

1979

-80

1981

-82

1983

-84

1985

-86

1987

-88

1989

-90

1991

-92

1993

-94

1995

-96

1997

-98

1999

-00

2001

-02

2003

-04

2005

-06

2007

-08

2009

-10

2011

-12

Year

Bu

shel

s /

Acr

e

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Corn Stocks by Country

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USDA Corn S&D

06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14

Planted Acres 78.30 93.50 86.00 86.40 88.20 91.90 97.20 96.50

Harvested Acres 70.60 86.50 78.60 79.50 81.40 84.00 87.40 88.80

Yield (bushels per acre) 149.1 150.7 153.9 164.7 152.8 147.2 123.4 163.6

Carryin 1,967 1,304 1,624 1,673 1,708 1,128 989 632

Production 10,535 13,038 12,092 13,092 12,447 12,360 10,780 14,530

Imports 12 20 14 8 28 29 125 25

Total Supply 12,514 14,362 13,730 14,773 14,183 13,517 11,894 15,187

Feed/Residual 5,540 5,858 5,182 5,125 4,795 4,548 4,550 5,400

Exports 2,125 2,437 1,849 1,980 1,834 1,543 825 1,500

Food/Seed/Ind 3,541 4,442 5,025 5,961 6,426 6,437 5,887 6,110

Ethanol for Fuels 2,119 3,049 3,709 4,591 5,019 5,011 4,500 4,675

Total Use 11,206 12,737 12,056 13,066 13,055 12,528 11,262 13,010

Carryout 1,303 1,624 1,673 1,708 1,128 989 632 2,177

CO/Use Ratio 11.6% 12.8% 13.9% 13.1% 8.6% 7.9% 5.6% 16.7%

13/14 = USDA OUTLOOK PROJECTION 2/22/13

46

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CHINA CORN S&D

46

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

01/ 02 02/ 03 03/ 04 04/ 05 05/ 06 06/ 07 07/ 08 08/ 09 09/ 10 10/ 11 11/ 12 12/ 13

in m

ln t

on

s

Carry- In Imports Production Total Demand (incl. exports)

Source: USDA - Updated: Apr 3,

47

4/24/2013

EU- 27 CORN S&D

0.000

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

0.000

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

05/ 06 06/ 07 07/ 08 08/ 09 09/ 10 10/ 11 11/ 12 12/ 13 13/ 14*

Carry- In Imports Production Total Demand (incl. exports)in mln tons Source: Strategie Grains/ USDA/ own estimate

48

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Corn Futures

Matif futures might rally on the back of US futures…

Matif

CME

49

4/24/2013

MATIF Corn and Wheat Price

150.00

160.00

170.00

180.00

190.00

200.00

210.00

220.00

230.00

240.00

250.00

260.00

270.00

280.00

290.00

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13

Corn Settlement price Wheat Settlement price

50

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GMO – Commercial Planting of GMO Crops (1997- 2012)

51

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Supply Chain

52

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Cost of shipment and Supply chain

Undoubtedly, the evolution

of the transport world between 2010 and 2050 will

offer many challenges, the biggest of which is

providing sustainable transport for the seven to

nine billion people at the lowest social cost

possible. These scenarios show that government

policies will play a critical role in determining the

most likely pathway into the future. World Energy

Councel

1500

Handling

1

5

53

4/24/2013

Conclusion/Challenges

The global consumption of starch in the main industrial markets

(Paper, Board, Corrugated board and Construction) will increase by

2040 (or much earlier) to a level of 15-19 million tons/a.

This growth is all expected outside the EU, NAFTA, Japan, and

Australia.

The starch value is much higher than shown by the market price,

surely in comparison with the direct alternatives. The price levels are at

such a low level due to very competitive (paper) industry and high focus

on food by starch suppliers

The starch raw material will be mainly corn (dent) based and this part

will grow. There will be a shift away from all the other starches in the

industrial applications.

The supply chain will remain short: limited handling and short

distances. Only short overcapacities will initiate short term long

distance shipments.

54

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PaperChem, UK Global Patterns of Starch Demand Producers, Products, Markets,

Supply, Demand 2011 – 2015, Giract May 2012 Chemical Additives for the production of Pulp and Paper, CHAD A GLOBAL PERSPECTIVE OF THE FUTURE OF STARCH USE IN

THE PAPER INDUSTRY DETLEV GLITTENBERG, MIIKA JOKINEN CARGILL STARCHES & SWEETENERS EUROPE

Fields for food or fuel, 2025, scenarios for a new biomass regime, project work.

The CEPI 2050 roadmap, Marco Mensink, CEPI Annual meeting 16/11/2011

IMF RISI Poyry, Finland The State of the Paper industry 2011.Environmental Paper Network Global Transport Scenarios 2050: World Energy Council Anderungen des Konsumentenverhaltens in der Nutzung von

Druckmedien. PTS Nachwachsende Rohstoffe fur die Paperindustrie. PTS China Paper Chemicals Market Study.CBI China Starch & Fermentation Analyses, LMC, Feb 2013

Resources: literature

55

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Support

Cathy Darwent, Paperchem, UK

Dr. Michael Schwarz, Voith GMBH, Germany

Dr. Roland Pelzer BK Giulini, Germany

Vincent, Pierre, Valentin, Michal, Lon, Roy, ao: all T&L

4/24/2013

Hanan, PM2, 4500 t/d, 11.8 m

56

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Koen Homburg/Johan Schrijver, Tate & Lyle

Who knows the target, can decide.

Who decides remains calm

Who remains calm is certain

Who is certain can think

Who thinks can improve

Thank you from Tate & Lyle

10th Starch & Derivatives Conference

April 9/10, 2013.

Hotel Beau-Rivage

Geneva, Switzerland

Paper 5 _____________________________ _____________________________ _____________________________

GLOBAL SHIFTS IN STARCH SUPPLY

JO GOOSSENS

GIRACT

_____________________________ _____________________________ _____________________________

GIRACT Geneva Switzerland

Global Shifts

in theStarch World

Jo Goossens, Giract

10th Starch & Derivatives Conference

Geneva, 10 April 2013

GIRACT

www.giract.com2

Presentation Outline

Shifts? … what shifts?

� Geographic, product, raw material, players, markets

Forecasting the future?

Megatrend effects:

� Demographics, resources, technologies, multi-polarity, climate change, fragility of systems

� mega-worries or mega-opportunities?

A new starch world…

GIRACT

www.giract.com3

Shifts?

GEOGRAPHIC

RAW MATERIAL

Key Players Markets

Products

GIRACT

www.giract.com4

Geographic shift primary starch production

Annual growth 2006-2010China 15.0%Other Asia 5.6%EU27 2.2%NAFTA -0.8%

GIRACT

www.giract.com5

Geographic shift consumption

Annual growth 2000-2010 2006-2010China 10.8% 10.4%Other Asia 2.5% 4.3%EU27 2.9% 2.2%NAFTA -0.9% -1.3%

GIRACT

www.giract.com6

Product portfolio shift

Annual growth 2000-2010 2006-2010Native starch 4.2% 7.9%Glucose 1.5% 2.8%Hydrolysates 6.7% 1.3%Dextrose 3.2% 0.7%Modified starch 4.9% 0.6%Polyols 4.7% -0.8%HFS 0.5% -0.1%

GIRACT

www.giract.com7

Leading players shifts

China

� Consolidation progresses

� 50% of starch output now controlled by 10 companies

� Top 10 around 85% average capacity utilization

� Top 5 - 10% of world output

GIRACT

www.giract.com8

Raw material shifts

Output increase since 2000

� Tapioca +105%

� Maize +20%

� Wheat +46%

� Potato +6%

GIRACT

www.giract.com9

Market shifts… no not really

Native/modified starch market: 60% Non-food – 40% food

Small changes only in other starch derivatives

Market demand oscilates between sectors as a result of price fluctuations

GIRACT

www.giract.com10

Forecasting the future

Since 2003 Giract endeavored to forecast these shifts in starch derivative demand based on:

� Macro-economic parameters

� End-use market growth forecast

� Changes in starch penetration in end-use

� Changes in starch derivative preferences (product change-overs)

� Historical starch derivative dynamics

� Anticipated regulatory/trade environment

� Other dynamics

What is the conclusion looking back ????

GIRACT

www.giract.com11

Forecasting the future

Starches

� Typically underestimated China and Other Asia

� Overestimated switch modified>native in Europe

� underestimated switch modified>native in NAFTA

GIRACT

www.giract.com12

Forecasting the future

Glucose – overestimated China and Other Asia

Glucose & HFS – overestimated NAFTA

GIRACT

www.giract.com13

Forecasting the future

Hydrolysates – underestimated China

Hydrolysates – overestimated NAFTA

Polyols – underestimated China and Other America

GIRACT

www.giract.com14

CompanyTransactional environment

what we can influence

Contextual environment

what we cannot influence

The environment is changing - from limited exposure

Since the mid 90’s, the industry has become increasingly exposed to external factors beyond its control and thus risk and strategy option assessment have become more difficult

<<’’9090’’ssCrop variation

Energy cost

Intervention prices

GIRACT

www.giract.com15

CompanyTransactional environment

what we can influence

Contextual environment

what we cannot influence

The environment is more uncertain

Since the mid 90’s, the industry has become increasingly exposed to external factors beyond its control and thus risk and strategy option assessment have become more difficult

>’90’s

GMO

Nutrition &

Health

Safety &

Traceability

CAP reform

Global trade

China boom

Sustainability

Bioenergy

Financial syst.

GIRACT

www.giract.com16

Uncertainty increases with these megatrends

- Aging, health, urbanisation, migration

- Fossil energy, minerals, water, space, ecosystems, labor, finance

- ICT, genetics, nanotech, biotech, mechatronics,…

- Asian advent, consumer power, new societal patterns,

- Weather patterns, sea-level rise, biodiversity, pandemics,…

- Social, finance, ecosystems, trade, global politics,

Ch

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GIRACT

www.giract.com17

Megatrend effects

Population size +20% (2025)

Aging 1/3 over 65 in 2025 in affluent regions of the world

Health issues 1.4 bio overweight 0.924 bio hungry

Migration increase due to economy, conflict, climate

EU: 85% of pop. growth is migration

Concentration 70% in cities (2050)

Social divide: Rich/Poor 1:3:2 >1:3:5 70% of middle class in Asia (2050)

New life patterns one-parent, active elderly

Ch

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GIRACT

www.giract.com18

Megarisks or … mega-opportunities

RISKS

•High calorie food & drink

•Food security > raw material and ingredient price volatility

OPPORTUNITIES

•Nutritional benefits,

•Elderly food

•Processed food development in Asia

•Migration will enhance globalisation of food habits

•Urban development

•Middle class spending power

Ch

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GIRACT

www.giract.com19

Megatrend effects

Sc

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With no change in consumption patterns, demand for food, water, land, energy will be 2x planet’s capacity (2030)

Uncertainty of biomass availability and price volatility (raw material, energy)

Land-grabbing China, Brazil, India in Africa

Water battles 2/3 world population in drought-prone areas

Shifts to more self-sufficiency in energy

Local production/sourcing constellations

Waste as raw material double waste output (2020)

Super-efficient urban environments

Biodiversity erosion

GIRACT

www.giract.com20

Megarisks or … mega-opportunities

Sc

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RISKS

•High energy and logistics costs

•Raw material availability and prices

•Cost of production (labor, investment)

> Margins?

OPPORTUNITIES

•New drive for diversification and innovation

•Drive towards sustainability

•Biofuels

•Biorefinery concepts

•By-products as new raw material sources

•Competitiveness vs. oil-derivatives (?)

GIRACT

www.giract.com21

Megatrend effects

Ac

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g

Te

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no

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Ch

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ac

t

Technological development contributes to relieving the pressure in the system but alos creates new pressures in society due to unintended consequences

Decoupling of resources and economic growth

Automatisation/robotisation > labor (demand, quality)

Optimal efficiency monitoring/steering/use

IP value erosion open source, open innovation

Virtual communities +/- social cohesion

Technology gap in populations/generations

Issues over acceptability (GMO, nano, biofuel)

Information overflow big data

Digital criminality

GIRACT

www.giract.com22

Megarisks or … mega-opportunities

Ac

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Te

ch

no

log

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Ch

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RISKS

•Creative destruction in industrial production and use

•Big industry faces investment gap to bridge speed of change > smaller scale and more flexible set-ups

•Speed more important than economy of scale?

•Intellectual property

OPPORTUNITIES

•Process and use control (speed, effectiveness, quality)

•Logistics chain control and anticipation

•New products (nano, biotech)

•ICT driven market & technical service

GIRACT

www.giract.com23

Megatrend effects

Fro

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Despite the globalizing world, it also becomes more fragmented, at the global, local, societal and personal level

More power centers (Brazil, Asia)

Shifting priorities from global to regional (megaregio’s, megacorridors, megacities)

Networked structures and organizations

Fading borders between industries (ICT/telecom, media)

Hyper-individualized consumption

Heterogeneity in society (culture, religion, social class, health status)

Tensions in international relations

Vulnerability to disruptive events

GIRACT

www.giract.com24

Megarisks or … mega-opportunities

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RISKS

•New competitors in new regions

•Disruptions in the production and logistic chain

•Corporate social responsibility

•Multi-cultural working environments

•Managing a global agenda

OPPORTUNITIES

•New customers in new regions

•New partnerships in development, production, marketing, investment

•New product/service concepts end-users > new product/service concepts for suppliers

GIRACT

www.giract.com25

Megatrend effects

Cli

ma

te C

ha

ng

eIt is no longer a myth but a fact. Keeping global warming below 2°C might be beyond our control

Frequency of climatological extremes (hurricanes, tornado’s, floods, rain/snow storms)

Water scarcity

Sea level rise

Ecosystem fragility (up to 22% of all ecosystems in the world may be affected) and loss of biodiversity will affect agricultural output

Pandemics (due to shifting vectors, protein shortage,…)

Societal pressures due to migration of people from affected regions

GIRACT

www.giract.com26

Megarisks or … mega-opportunities

Cli

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ha

ng

eRISKS

•Disruption of production and supply (energy cuts, transport blocks, site damage, …)

•Pressure on sustainability requirement for entire production chains (energy, raw material)

OPPORTUNITIES

•Changing cultivation options in major agricultural territories

•Sustainability driven business models (e.g. car industry)

GIRACT

www.giract.com27

Megatrend effects

Inc

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g

Fra

gil

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all

Sy

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ms

The complexity of systems and the growing interconnectedness between them also increases the risk for systemic failure

Protectionism

Self-sufficiency

More control mechanisms to avoid disruptive effects

Lower sense of security/safety

Growing demand for transparent decision making will increase influence of consumer/citizen

Weakening of global organsiations

New societal power blocks and independent organisations (NGOs, patient- and consumer groups, etc.)

Concentration70% in cities (2050)

GIRACT

www.giract.com28

Megarisks or … mega-opportunities

RISKS

•Disruption of logistic chains

•Failure of financial system

•Global trade disputes

•Protectionist barriers

•Transaction costs

•Growing interference from all kind of pressure groups

OPPORTUNITIES

•Those who want and can do things differently may regain credibility with societal actors and claim industrial thought-leadership

(e.g. Nike ‘Raising the Bar’, Patagonia Living with Limited resources’)

Inc

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all

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GIRACT

www.giract.com29

What new starch world will emerge?

How will this shape the starch industry?

GIRACT

www.giract.com30

How will the starch industry anticipate?

What new starch world will be created?

GIRACT Geneva Switzerland

Answers will only be found if one is preparedto raise the right questions in the first place

GIRACT Geneva Switzerland

Thank You