Developing New Chemical Products

Mostly for polymer chemists. The first part of an open ended series on product development.

Hey, this is mainly written with the graduate students and professional chemists out there. I’m sorry if it’s not readily accessible to most people, but I am making efforts to have it be as accessible as possible.

Chemical products are the embodiment of chemistry that holds value to the public that is not easily achieved by an individual. If Prometheus brings fire to humans then it is humans who figure out that burning wood is inefficient and that charcoal burns hotter, has less smoke, and is better for cooking. Wood is a combination of cellulose (polymerized glucose), lignin (polymer of three aromatic alcohols), and some hemicellulose (C5 sugars). Making charcoal involves removing the majority of the oxygen and hydrogen by heating wood up without much oxygen available (rudimentary pyrolysis). Making charcoal is terrible for smelting iron, but it can be done. Charcoal use enabled humans to understand the importance of coal, which is great for smelting iron compared to charcoal. The start of the industrial revolution in the mid 18th century also started modern industrial chemistry and coal was a big push towards the direction we have traveled.

With respect to chemistry there have been a few major tectonic shifts that have altered how chemistry impacts our lives.

1. We realized that we could make a lot of chemicals from acetylene

2. We were able to distill and crack crude oil.

Acetylene is a chemical product from making coke (a product of coal). Edmund Davy discovered acetylene in 1836 when he mixed water with potassium carbide, which generated acetylene—a chemical that could be burned to provide light or transformed. Ironically, coal miners first used calcium carbide lamps to navigate the darkness of coal mines.

Acetylene chemistry helped grow synthetic organic chemistry as a discipline because standardized chemicals could be readily extracted without requiring the laborious processing of biomass. Prior to coal, isolating chemical compounds and doing chemistry that is now taught in college was quite difficult and laborious. Other instances of commercial chemical success prior to coal would be paper making, sulfuric acid, and soda (not Coca-Cola).

The second shift occurred when crude oil was able to be distilled, catalytically cracked into gasoline, and steam cracked into ethylene, propylene, butadiene, benzene, toluene, and xylenes to name a few. The abundance of these basic chemical building blocks, which we know now as commodity chemicals, unlocked synthetic organic chemistry as the most transformative technology of the 20th century. 

Chemistry and Polymers Delivered The Future

Synthetic organic chemistry was the driving discipline of catalytic cracking, which led to making high purity fuel for tanks, airplanes, and jeeps and having an abundance of high quality fuel was critical to the success of the allied forces winning World War II.

Chemists at ICI discovered polyethylene, which revolutionized how we insulated wires and ultimately revolutionized the way we communicated. The first trans-Atlantic cable that went from the US to England was laid across the bottom of the Atlantic Ocean and it was insulated with polyethylene. 

Polymerization of styrene and butadiene would lead to the development of synthetic rubber and is still the rubber we use in the tires on our, cars, trucks, motorcycles, and bicycles today. We use rubber in our shoes, in the gaskets in our plumbing and car engines, and in toys for our dogs.

Chemistry would be the central science behind making the semiconductors that give Silicon Valley the name it bears today through Fairchild Semiconductor. 

The other driving force, besides the elegant and efficient chemical reactions, was that these inventions would become commercially successful and thus transformative through the instrument of capitalism. Arguably, the chemical industry was already transforming the world with mass produced sulfuric acid in the early to mid 18th century, but I think things really took off in the early 20th century. The chemical industry would lead to the growth of both chemistry and chemical engineering departments at institutions of higher education. 

The confluence of chemical reactions, their scale-up, economies of scale, and capitalism have pushed us to heights that Jules Verne could only imagine.

Doing New Product Development Now

The problems that need some chemistry to be solved are some of the biggest ones in the world, but they are also problems of our own making. These are problems that are also not readily solved through software and some venture capital money. We are trapped by the systems and the economics of what got us to where we are and I try to illustrate these issues through writing this newsletter. We are not only trapped in our current system, but we are paying for the externalized costs that our society has accrued over the last two centuries. These headwinds make change difficult.

The majority of the chemical industry’s products are mature. The figure below is an illustration of how a typical product goes through a life cycle and the “product extension” portion is often the job of many industrial polymer chemists or those involved with the specialty chemical industry.

Source

The job often (not always) involves cost cutting or trying to match someone else’s product to gain market share because in the short term the chemical industry is a zero sum game. When one company gains, another typically loses.

Long term investments in chemical products are often the best way to create value. Ideally, the value is created by creating a whole new category of product that does something nothing else has been able to achieve. New categories are great because the competition has to catch-up and the knowledge is not readily available and it is non-obvious. The issues is that these products can take 3-5 years to launch and another 2-3 years of customer qualification and market adoption. Best case scenario is that it takes about 5+ years to get to the introduction phase where a new product is in the market or about 15 years left on a patent. Thus, your sales team only has 15 years left to sell and gain market share. Meanwhile, the competition can introduce copies of your product in other markets where winning an infringement case can be difficult. The problem with long term investments is that it can be tough to sell to shareholders and it’s unclear if the investment will work. Everyone wants a risk adjusted home run.

A story that was once related to me went something like this:

Marketing/Sales Person: “So which one of these R&D projects can you guarantee will work?”

Chemist: “You don’t really understand how this process works do you.”

This is the first in a series of posts that will cover my experiences in launching something new, working on product extension, and trying to cut costs to prevent sales decline. I’ll also try and cover companies and start-ups trying to execute new chemical products and provide some commentary. As always reply or leave comments if you’ve got something constructive to add.

Tony

PS. The next part of this series takes place here.