An interview with Tony Duncan, CEO Circa Group, the Most Innovative Bioeconomy CEO 2017

Tony Duncan

Last December Tony Duncan, CEO of Circa Group, was nominated by our readers the Most Innovative Bioeconomy CEO 2017. In this long interview with Il Bioeconomista, he talks about this recognition, what is innovation, the bioeconomy and the next steps of his company.

Interview by Mario Bonaccorso

First of all, congratulations for the recognition as The Most Innovative Bioeconomy CEO 2017. What is innovation in the bioeconomy, from your point of view?

Thank you – it was certainly a surprise to be nominated, and the result is very much a confirmation of Circa’s approach and the efforts of the team over the past 9 plus years – staff, shareholders, researchers and partners!

Circa’s definition of innovation is the obvious “invention and commercialisation”, and while I don’t see there is any high-level difference between innovation in the bioeconomy and the more general economy, there are certainly some differences in the details.

We currently see a lot of bio-developments focussed on simply replacing fossil based products with bio equivalents – i.e. kicking the sustainability can down the road and the intractable environmental issues usually remain. I guess it appeases someone’s green “mission statement”, or the demands of short term financiers, but often leads to the innovation process stopping prematurely. And while I haven’t done the sums on the nett investment equation for this “me too, drop-in” approach, I’d guess it destroys more cash than it creates.

For Circa, innovation comes down to three specific issues:

  • Knowledge of how to make our base product has been around for many years, but we approached production of levoglucosenone as a continuous process rather than batch. While some of the issues we’ve faced have certainly been non-trivial, it has enabled us to consider opportunities with volumes / price points that were previously unviable.
  • Most new bio-products face highly conservative supply chains that do not change without very compelling reasons. While we knew we had great products, without the push of regulatory pressure the opportunity for Cyrene™, our polar aprotic solvent, would have taken many more years to develop. The corollary of this supply chain inertia is an observation on the solvent market. There have been very few new solvents successfully commercialised over the past 30-40 years. When we ask companies why they use a particular solvent – NMP, DMF, DCM etc – the answer is more often than not “because we always have” – so fundamental solvent expertise has missed a generation. While the past 30 years have seen huge increases in the capability of analytical techniques and process systems, our experience is that few companies have an in depth, fundamental understanding of optimum solvent properties for a given reaction. A challenge and an opportunity!
  • With levoglucosenone, it’s very easy to die a death of a thousand initiatives. To avoid this, we’ve deliberately focussed on Cyrene™ as the commercial volume product, while working on a limited number of higher value products for smaller markets.

And what is the innovation achieved by Circa Group?

Although our core Furacell™ technology is a key part of the Circa innovation, the way we have structured Circa over this time has been the crucial “innovation”. Not unlike many other companies, we have taken an approach that focusses on a small number of key criteria and are building the companies expertise and systems to support these:

  • A proprietary invention that uses non-food, waste cellulose as feedstock,
  • Focus on niche markets
  • Rather than try and invent everything “inhouse”, use external experts to develop products / derivatives.
  • Minimise early stage capital
  • Keep talking to customers at every step

What does it mean for you to be voted as the most innovative CEO?

As mentioned above, the real benefit has been recognition of the efforts and persistence of the Circa team, our shareholders, and also the fine researchers we’ve worked with over a number of years. Prof James Clark at University of York, Dr Ben Greatrex at UNE and Prof Florent Allais at AgroParisTech and Prof Richard Furneaux at VUW in New Zealand, have been hugely influential to our developments, while Merck Sigma have shown considerable patience as we get product commissioning under control – and of course our more recent partnership with Norske Skog to build the FC5 plant in Tasmania.

2017 has been an important year for your company. What achievements do you consider as the most relevant?

It’s been a very positive year on a number of fronts. Our joint venture with Norske Skog has seen the commissioning of our 50 tonne per year prototype plant (FC5) underway in Tasmania. A growing partnership with Merck Sigma, and distribution agreement with Will & Co provides committed distribution to key markets, the Biochemical award for 2017 for Cyrene ™ and the announcement of levoglucosenone as number 3 in the top 10 UK biochemicals have been important boosts.

Another very pleasing development during 2017 has been discoveries by young scientists in the UK, France, Australia and the US. We are seeing exciting new levoglucosenone based chemistry from early career researchers prepared to take a chance with a comparatively unknown molecule – and an important challenge for Circa is to bring the best of these opportunities to market over the next 2-3 years.

What are your plans for 2018?

2018 has some interesting challenges and opportunities. Final commissioning of our FC5 prototype manufacturing plant is the foundation for both increased product availability and market opportunities……then we start planning for FC6.

In parallel, we will complete REACH Annex VIII mid year for Cyrene™ – we see this as a real opportunity to differentiate Cyrene from the more toxic polar aprotic solvents.

There are also a couple of new solvents in development. One of these, Cygnet™, has properties close to chlorinated solvents – highly unusual for a bio-based product, and quite exciting. Some more work to be done, but I would hope we will be in a position to start field trials Q4 2018.

We are also pursuing a limited number of opportunities for product jv’s in areas such as herbicides and specialty polymers – using levoglucosenone as the starting point.

For the second consecutive year the CEO of an Australian company wins our award. Australia’s bioeconomy seems to be underestimated in the global context. What do you think are the strengths and weaknesses of the bioeconomy in your country?

A major part of Australia’s wealth has always been “bio” based. Agriculture and forestry have been key industries, and have needed ongoing innovation to be able to compete in global markets –in markets as diverse as dairy products, wheat, eucalypt forestry or fibre based packaging. In our specific niche, Australia has a number of issues relating to market size, a lack of a traditional chemicals industry outside oil and gas, and a Federal Government that really doesn’t understand the space. However on the positive side, there is a strong level of private support for more sustainable industries, which has seen all our funding to date raised locally – supplemented by good support for the FC5 prototype plant provided by the Tasmanian State Government.

What are the main Government’s measures to support the bioeconomy in Australia? And what is the bioeconomy perception by Australian public?

As mentioned above, we have been fortunate with State Government support – and this has been critical in getting us out of “bench scale”, and a key Federal Government policy is R&D tax incentive which has been of significant benefit to Circa.

There are other smaller Federal initiatives which have also helped over time – although these tend to come and go with current governments and Ministers.

And although that might sound a bit negative, there are signs across Governments of a growing understanding that innovation does not just equal invention. For too long policies have focussed on supporting the “invention institutions” and missed the need to balance this with the commercialisation imperative. However, Australia is not alone here.

Our experience with Australian public has, in contrast, always been very positive – and we are continually amazed at the interest shown in sustainable industries and Circa’s development and progress.

How important is to collaborate at global level for the enterprises involved in the bioeconomy?

I think collaboration has become a warm, fuzzy statement – overused and a bit meaningless.

A company’s strategy should be to build dynamic interdependence between key actors in their chosen markets – recognising that there will be tension as markets adapt and seek out new, more sustainable solutions, and this disruption is the real opportunity for all involved.

It’s not dependence – reliance on one or two upstream or downstream actors for survival; and it’s beyond independence, where we try and go alone, taking on the goliaths of these massive industries……and where the inertia of conservative supply chains usually overwhelms the novelty impetus.

Interdependence is when companies exploit each others core strengths to support the strategic aims of both companies. Interdependence is not related to organisational size or geography – but does require mutual respect, high trust and an ability to look and work beyond next quarter’s results. And I think the best bioeconomy innovations show these traits.



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