Capable of synthesising the abundant natural resources of the Philippines into world-class chemical products, Chemrez Technologies is a leading provider of green chemistry solutions, and a company committed to the elimination of potentially hazardous substances within a range of industrial chemicals and consumer goods. Marius Goubert speaks with Mr Dean Lao Jr., Managing Director, to learn about his company’s role supporting businesses that strive to deliver safer and more environmentally friendly products to their customers.
From agricultural pesticides to petrochemicals and beauty products, the activities of Chemrez Technologies encompass numerous areas of manufacturing, with the company utilising its extensive R&D resources in an effort to redefine existing production practices and introduce what it terms ‘green chemistry’. As a producer of chemical ingredients required for a range of manufacturing processes, Chemrez Technologies operates a B2B sales model and supplies its products to a variety of downstream manufacturers. Such a position has made it the first port of call for businesses seeking to innovate their product lines in response to changing market demands. The elimination of potentially hazardous chemicals has become a key requirement and, in response, Chemrez has emerged as a pioneer of new, naturally derived, chemical substitutes.
“Chemrez is actually part of a group of companies called D&L Industries Inc., which are the initials of the two brothers, Dean and Leon, who originally founded the business”, begins Mr Lao. “We started off around 1963 as a chemical trading firm and, over the years, gradually evolved into a large-scale manufacturer. Since the inception of the business, our expertise has always centred around the chemical industry, and we currently focus on three main product groups: resins, oleochemicals and colorants. Within these three different product fields we cater to a diverse range of manufacturing industries, which would include plastics, soaps and detergents, coatings, ink and adhesives.
“While we have traditionally been a supplier of intermediate raw materials, we have, over the years, started catering to customers engaged in the production of consumer based products. As a result, the underlying vision and mission of the company has come to centre around this idea of ‘green chemistry’. We are heavily engaged in R&D, and a significant proportion of the different innovations that we bring to the market aim to provide chemicals that are friendly to users and environmentally sustainable.”
Core of the company
This commitment is reflected in the company’s production of resins, where Chemrez Technology strives to replace solvents with water-based polymers used in the production of inks and coatings. “We do a lot of business with major paint producers,” continues Mr Lao. “The resins we manufacture form the backbone of decorative paints, and provide an opportunity to introduce non-petrochemical derived raw materials. On the colorant side, we make a lot of water-based colorants, and this technology can also be used to impart colour onto solvent-based products. Similarly, when it comes to oleochemcials, we use vegetable oils as our starting raw material instead of petroleum-based oils which means these products are renewable and very friendly to users. Most of these solutions go into personal and home care products ranging from soaps to detergents.”
For its production of oleochemcials, the company makes methyl ester (technical name of biodesiel) production facility with a capacity of 90,000 tonnes per annum. “Utilising specialised equipment, we are able to bring a variety of downstream products into the value chain and towards becoming innovative, consumer products,” resumes Mr Lao. “But while we produce higher value oleochemical products, we stop short of branding the product and marketing it as a branded consumer product. On the resin side, we have an installed capacity of 20,000 tonnes per annum and our end products comprise various types of resins, some of which are water-based and some of which are petrochemical-based. The colorant business, meanwhile, is more of a high-value, low-volume type of operation and there we are producing around 4,000 tonnes on an annual basis.”
The facilities and associated infrastructure managed by Chemrez Technologies occupy an area of six hectares and are situated in Quezon City – one of the cities making up Metro Manilla, the National Capital region. “Around 78 per cent of our business takes place within the domestic market,” points out Mr Lao. “In terms of our activities within the wider international market, meanwhile, we are engaged across every continent, and we tend to focus on those areas where we have a clear competitive advantage. We market a significant volume of oleochemicals derived from coconut oil to our overseas clients. Indeed, the unique properties of coconut oil mean that it has a very similar structure to middle distillate petroleum products. It is a highly versatile resource with unique properties that make it an ideal replacement for petrochemical-based chemical products.”
In view of a visible demand for safer and more renewable raw materials, with consumers increasingly attracted by products derived from natural sources, Chemrez Technologies is experiencing a growing need for its expertise across multiple markets. “Whenever customers see a product that emphasises the fact it is manufactured from natural sources, they are far more welcoming,” explains Mr Lao. “Consciousness is there and growing, and we have concentrated our R&D efforts towards the creation of new markets where oleochemicals were never present before.
“These capabilities have also enabled us to distinguish ourselves and to become highly attuned to what our customers are looking for. They normally approach us with requirements that are highly specific. If we take resin, for example, a certain client might be looking for a resin with a special property, performance or trait. We do a lot of research in-house to deliver customised solutions and this helps us to develop a close relationship with our customers. This has always given us more of an advantage over competitors who tend to compete on a commodity basis. It is not always simply a case of low cost or prices, but more about the value that the products have in the eyes of discerning customers. We have therefore invested in a world-class facility for developing new chemical solutions, and have around 100 technical staff – one quarter of the workforce – engaged in the development of new chemical solutions.”
The company’s recent development of a new breed of organic-based biochemicals for the agricultural industry stands out as a particularly prominent example of this creative approach. The Philippines is one of the largest global exporters of bananas – products that, on average, are sprayed by pesticides every fortnight. “Before it reaches maturity, a banana will be sprayed with pesticides around 50 times,” stresses Mr Lao. “This can have negative implications, particularly if there is an overuse of chemical pesticides by the farmer. As a result, we were able to come up with a banana spray that is organic and highly effective at keeping away pests. It also produces a cosmetically beautiful banana without the use of potentially harmful or carcinogenic chemicals. This solution can be applied without raising the costs of pest control and this product not only has high potential in the Philippines, but could also be exported to other key markets such as Ecuador.”
Derived from coconut oil, this solution – which has been developed under the name ‘CropGuard’ – is an organic, eco-friendly solution with a very low environmental impact. It is easily biodegradable and effective at combating sigatoka, which is a major leaf disease affecting commercial bananas for export. Furthermore, tests have revealed that the use of CropGuard as a standalone organic insecticide not only ensures a good harvest that is on par with standard insecticides, but also eliminates the health and environmental problems associated with the excessive usage of chemical pesticides. “CropGuard remains new and is still going through a lot of trails,” informs Mr Lao. “These have been consistently positive and we are approaching the market introduction phase.”
The company’s pioneering development of coconut-based surfactants, meanwhile, has also enabled it to forge strong links with a locally-based organisation called Human Nature. As a social enterprise, Human Nature produces world-class natural and organic beauty, personal and home care products, and invests the proceeds of its business activities into social development schemes. The company has stringent criteria when it comes to selecting naturally-derived chemical raw materials, and opted for coconut oil-based cleansing agents manufactured by Chemrez Technologies as both companies shared common principles and values. Savonel and Hi-Foam were specifically developed by Chemrez to replace SLS and SLES which, while widely-used in personal and home care products, are known to cause skin irritation and contain traces of a potentially cancer-causing chemical.
These two case studies provide an insight into the underlying reasons behind Chemrez Technologies’ success over the last five decades. “We are able to give customers what they need through a close understanding of their unique requirements,” resumes Mr Lao. “The demand for what we term ‘friendly chemistry’ is a real trend in the market, but it is far easier said than done. It takes a lot of resources to develop a product, from formulating it in the lab to scaling it up for commercial production and designing the facilities that are required to achieve delivery. This is something that we are doing continuously by making a range of unique products and then scaling them up as markets expand. For example, while it remains too early to discuss in detail, we are now in the process of scaling up the production of a new, edible product that has all the benefits of a cooking oil without the negative health implications. We are currently at the stage where we are sizing up the market to justify the capital expenditure needed to set up that facility.
“For the future, we have a fairly specific direction that will remain centred around green chemistry. We will remain true to our core principles and stay sensitive to what our customers require in a fast changing market, and will emphasise innovative solutions based on green chemistry as a way of getting there. We will make the most of our natural materials as a means of replacing petrochemicals, and providing new approaches to manufacturing that are both user friendly, environmentally sustainable and competitive in terms of cost,” he concludes.