Renewable Oil Markets
Solazyme oils address many of the challenges associated with traditional oils, such as constrained supplies, volatile pricing, and potentially negative and irreversible environmental effects. The "drop-in" nature of our tailored oils enables compatibility with existing production, refining, and distribution infrastructure in each of our target markets. Our oils can be tailored to address key performance properties of petroleum and/or other natural oils.
We believe the greatest market needs our technology platform can address are in the fuels, chemicals, nutritionals, and skin and personal care markets.
Global demand for alternative fuels is expanding due to population growth, increased attention to energy security, and environmental policy mandates. For example, the Environmental Protection Agency set 2011 renewable fuel standards volume requirements at 1.35 billion gallons of advanced biofuels. And the U.S. Navy's goal is to operate at least 50 percent of its fleet on clean renewable fuel sources by 2020. Achieving this objective will require a significant use of biofuels. There's also a growing market for tailored oils to compete against other biofuel sources, such as soy oil in Brazil and rapeseed oil in Europe.
Petrochemicals are another significant oil market, estimated at $611 billion. In addition, attractive opportunities exist in the oleochemicals (derived from fats and natural oils) market. In 2009, about 9 million metric tons of palm kernel and coconut oils were consumed globally for food and industrial applications such as laundry detergent, soap, and shampoo. Meanwhile, functional fluids (derived from either petroleum or other conventional oils), such as airplane de-icing fluids, must meet strict industry requirements and possess specific physical properties, which increases their market value potential. Solazyme's tailored oils are a natural fit for these markets. Solazyme has announced partnerships in the chemical markets with Unilever and The Dow Chemical Company.
The $2 trillion packaged food industry is actively seeking more natural, sustainable sources of fiber and healthful fats without compromising value, quality, taste, or nutrition. Food systems are complex, and Solazyme tailored oils can be crafted specifically to achieve the performance and shelf-life properties of food products. Solazyme has partnered with Roquette Frères to launch Solazyme-Roquette Nutritionals, a joint venture commercializing a suite of microalgae-derived food ingredients.
Our Health Sciences business is targeting the global skin and personal care market, which is estimated at $323 billion. Within this market, we target (1) toiletries, makeup, and hair care, estimated at $239 billion, and (2) skin care, estimated at $84 billion. Consumers are staying active and living longer, and their desire to appear youthful will continue to drive growth in the beauty and personal care markets. Solazyme has developed microalgae-derived skin care products and signed distribution deals with Sephora International, Sephora USA, and QVC. Unique to our business, we are entering into to this market with Solazyme branded products, including Algenist.