The scale of the energy business is such that firms with more than $10 billion in revenue can fly beneath the radar of public attention and, sometimes, even within the industry itself.
Dutch firm DSM is one such company. Despite its leading role in first developing, and then manufacturing, a significant number of the components that go into making the daily business of the energy industry possible, it remains comparatively low-profile.
People will look back 500 years from now and talk of the ‘fossil age’
DSM has proved nimble at navigating a shifting energy business, transitioning from its founding more than a century ago as a coal mining firm to global petrochemicals leadership and specialty materials, like medicine manufacturing for major pharmaceutical brands.
That makes the company’s recent moves into advanced energy technologies even more fascinating for both its competitors, many of them far larger, as well as for regulators and consumers faced with difficult choices amid rising prices for traditional energy products.
DSM Chairman and CEO Feike Sijbesma was in New York recently for meetings, and Breaking Energy had the opportunity to sit down with him for coffee in the resplendent and thankfully well air conditioned environs of the Plaza Hotel’s lobby.
Change is rife at DSM as it scales up its biogas and biofuels businesses and leverages its expertise in materials production to create more efficient materials for the wind, solar and ships (see a video of the company’s sail-equiped oil tankers here). The company also has a growing profile in the automobile market, where it produces super-light materials than can replace steel in engines and make vehicles more efficient.
The changes are based in Sijbesma’s philosophy about the larger twists and turns of industrial history.
“People will look back 500 years from now and talk of the ‘fossil age,'” he said, speaking just loudly enough to be heard over the dramatic and surprisingly loud classical music piped throughout the hotel’s public spaces.
Sijbesma’s viewpoints go beyond “peak oil” to forecast only 30 years remaining for conventional oil production, and only 70 years beyond that if deep offshore and tar sands production is fully utilized. The cost pressures for fossil fuel-based economies have only just begun, and the entire global society needs to get ready to switch its energy and materials needs away from fossil fuels and into advanced bio-based processes, Sijbesma says.
“Switches [in industry] occur when you are over the hill, and the switch is taking place right now – to the biobased age,” Sijbesma says.
DSM has put its money behind its theories, purchasing Maryland-based Martek Biosciences in February for roughly $1.08 billion. The acquisition includes a collaboration with oil company BP on algae fuels, giving the firm a further leg up on research and development of new fuels.
Despite his conviction, Sijbesma speaks seriously about the challenges to moving ahead into the bio-based future for the energy business. Technology, consumer attitudes and the global imbalance between target-setting and execution all come up for mention.
The difference between consumers and citizens remains a challenge for all sectors trying to improve energy efficiency and produce cleaner devices and supply chains, he notes. The same person who supports clean energy in the voting booth or in surveys is one who remains hesitant to pay more for goods with green credentials.
With China growing its economy at a sustained immense speed, Sijbesma worries about the gap between its installation of massive new clean energy infrastructure and its sustained resistance to emissions targets or pollution pricing. The country’s two-track model, in tandem with resistance to change in the US, has put Europe on an uneven playing field.
“Europe should not always have to be the best boy in class,” Sijbemsa stressed. He noted that efforts are currently underway to tighten already-ambitious energy standards in the European Union.
Despite the challenges, the company – and Sijbesma – are getting positive attention for their work. He was recently awarded the Biotechnology Industry Organization‘s George Washington Carver award for innovation at its global congress in Toronto, joining the company of scientists and leaders at giant firms like Dow Chemical and DuPont.
With so much work ahead of him, Sijbesma is busy during his trip to New York and wraps up his meeting with Breaking Energy before heading into the hot summer Manhattan morning, charging into his bio-based future that lingers temptingly over a hazy fossil fuel horizon.
Image: DSM Chairman and CEO Feike Sijbesma
