Biogreentech opportunities for Malaysia

1. Assessment of biogreentech opportunities

1.1 There are multiple pathways  for obtaining either drop-in biofuel or specialty biorenewables, the next step from the now outdated first-gen biofuel production of ethanol or blended fuels. The corrosive nature and the requirements for government regulatory mechanisms to create an artificial market has caused innovators to look at increased premium margins in eating into the lucrative downstream petchem applications.

1.2 Innovation in process flows looks at enabling production efficiency and effectiveness to give competitive advantages, although IPs are still a valuable source of building a competitive business model ala Lanzatech. For investors, it is necessary to validate claims of competitive advantages, as market domination of a particular biogreentech production material gives de facto or de jure standards to a market searching for an alternative to O&G dependence. Securing significant market access is good, and one that is not naturally dependent on an artificially induced market driven by government regulatory mechanisms and subsidies.

1.3 Having said that, at the infancy stage, it is perhaps impossible for alternative biogreentech products to achieve cost parity to that of the fairly established supply chain in using the conventional O&G pathways. Add into the mix possible lowering of costs with newer techniques of fracking for shale gas and the scenarios get a little bit dimmer. Supply side enhancements may keep oil prices within a lesser volatility range from previous decades arising from the changing geopolitical interests of the US. (ie I do expect the US to stop eyeing other oil-producing countries as military chessboards) Previous volatility at peak oil prices provided some impetus to the alternative markets and there will be some weakening of willpower to the 'alternatives' lobby. 

1.4 Having said that, the gas 'boom' driven by shale gas may actually assist KIOR, Amyris, Gevo(?) that can utilise cheaper gas to drive its production. Sensitivity may vary, as cost structure stacks up highly for the feedstocks, and the 10&-20% lower variation in gas pricing may not necessarily be an effective game-changer for the alternatives to lower product pricing and maintain much-needed margins.

1.5 Snide remark that it has been over 40 years of renewables lobbying to displace the oil majors, and the domination has been even more entrenched now that the oil majors have added their capacity to absorb variability in oil prices in maintaining supply to economic demand requirements. Won't be easy to displace the oil majors, eh? So, what was that with Shell co-investing in Codexis and then deciding it's no big deal to reprioritise when the macro-drivers change?

2. Regulatory story

2.1 The questions then are: how long and how much will it cost the government to maintain support before the alternatives gain self-sufficiency? Interesting that Bio lobby has bent over in praising the US Congress with whatever they are coming up with in terms of RFS, no matter how uncertain the regulatory outcome will appear.

3. Investing story, and national interests

3.1 How would a small, open economy deal with these changes? Government support should lrgely be based on economic growth driven by enhanced environmental sustainability. But that's too naive. Other economic spinoffs, multipliers need to be formulated before supporting these industries. What of potential benefits to existing corporate ventures, or NOCs?

3.2 It is quite possible that the innovations will continue and will come from the traditional powerhouses say the US due to ability to sustain the early-stage technological breakthroughs. The downside for say Malaysia is how do you then tap into that market while incurring increased risks of currency outflow, potential limited displacement capability wrt O&G downstream industries, feedstock supply and pricing issues and even in the case of Gevo, scaleup technology risks?

3.3 It is quite possible to look at the investments and come to a conclusion that NOCs are the only sort of players able to undertake the huge capacity and financial risks in this sort of venture, leaving the VC/PE investor as the means to access and assess the feasible biogreentech venture for the NOCs to consider.

3.4 Then it comes to what sort of IRRs will make sense, in light of potentially lower or stagnating suppport for these industries. What sort of capacities are required to bring these investments to commercial markets? In the current depressed state of the advanced biofuels share prices due to a lack of direction from the US regulators, shouldn't this be an opportunity to advance using the depressed pricing by averaging down costs, or is this doubling-down potentially giving the investors an even more severe outcome than what it is currently?

Personal Charter

Just thot I'd need to post this in a public space:

PERSONAL CHARTER

April 5, 2011

Realising that secular objectives, no matter how interim, is both misplaced and destructive, that I shall strive insyaAllah and with Allah’s guidance, to fulfill my fullest potential, and also to bear responsibility of realising the potential of those under my care, which includes my wife and children, and be the most positive influence I can be to others that I come into contact with, to benefit the purpose that Allah has given to His creation.

September 18, 2009; 28 Ramadhan 1430H

For the next 5 years, my financial planning mission shall be:

• Benefactor to others

Work only for a worthy cause 

Secure dependents

1 Jan 2007 (with minor edits)

• I will ensure my life and my family will live a life of integrity according to values approved by Islam and social order;

I will be determined in ensuring we reach that goal while at the same time ensuring my parents are safeguarded;

including my wife and children; and our relations

• I will have determination that I build up through persistence and tenacity;

I will pursue those goals with bravery and courage, and not be stopped by fear

• I will pray that Allah protects my objective and makes it easy

I will also have understanding and tolerance for other people's viewpoints, perspectives, problems, concerns, and make it my own

• I will use my rational thought coupled with hope and prayer to its fullest ability and find the opportunities that life brings for the betterment of this life

Bye bye 2012

Some reflections:
1. Liverpool under Brendan, 2013 and beyond
Looks like Sturridge is coming after all. How would he integrate with Suarez? How does BR manage Gerrard and Henderson? How does he organise the back 4 or 3 given the silly goals that the team has leaked to Route 1 and simple direct attacking from simeple direct opposition?

Performances have been good to insipid. There is a lack of rotation, and given the smallish squad how will they cope in the second half. BR needs to show he has solutions for all of this. In the second half, I predict more of the same against the top 5, ie if we are lucky and being optimistic, 6 points from the 5 games against Utd, City, Chelsea, Arse and Spurs. The middle 7 are mainly home games, but our own home games have been awful so far and Anfield is no fortress. A mere 2-3-1 result against Everton, WBA< Swansea, Norwich, WHU, Sunderland could be best. And 15 pts out of the bottom 7 which are mainly aways again seems pretty optimistic. All in, leaves 59 pts for this year. Awful, but a basis to start 2013/14 season. Beyond? Difficult considering transfer performance is where you could get quantum increases in performance, as shown by Rafa and Houllier or even Dalglish part 1, or drastic underperformance under Hodgson and Dalglish Part 2. Not sure how good BR is in the transfer market, but based on 1 window so far, pretty much underwhelming.

Rafa does seem to impress at Chelsea so far though.

The unemotional malay

1. This is truly the age of fitaan. And the worse thing for Malays is that the precedence for overcoming the dilemma is to embrace pragmatism that perverts truth.
2. Over the past 50 years since the federalism was established, the fractured Malay factionalism was only truly united over the period of 1989-1998, when UMNO as a party consolidated behind the great overlord, and Malaysians gave undivided loyalty to the ruling party that dominates the alliance. Before that period, you could trace the factionalisms within UMNO itself, when there were competing warlords. Thereafter, many Malays questioned the benefits of giving their undivided loyalty such that rule of law was abused with such impunity. That 'reluctance' grew such the same questions were asked of other communities and the agenda for truth then took on its own engine, such that the agenda has taken on its own life, even to the extent of it spiralling beyond the comfort zones of the malay-muslim community, a situation unheard of 20-30 years ago. For Malaysians, this is as living on the edge as it gets, as the situation of 1969 is raised whenever 'sensitivities' are raised.
3. Malay royalties presiding over a relatively less educated, less priviledged Malay majority never had to contend with an uprising. Malays are tolerant, the recipients of perhaps the ultimate backhanded compliment of 'nature's greatest gentlemen'. So, these times are a novelty.
4. We should ultimately be thankful for the leadership over the last 50 years that the Malays are in such a priviledged position as they are now, the DEB being a pragmatic device and a diplomatic victory that was secured on the back of a critical failure of the racial riots of 1969. At the same time, the same concessions that was secured then created a race that had become dependent on the handouts. Amendments are required yet this conversation on a social contract has not yet opened up within the Malay community, and how could it when raising issues of this is considered a criminal offence?
5. Malays- forever afraid of rocking the boat, forever afraid of leaving their comfort zone, forever conventional and traditional - and what other mindset can explain the fact that Abdullah Munshi, a well-travelled journalist (blogger?), a government translator, could be so well received in the history books when someone of this profile are a-dime-a-dozen in many other cultures. Now dont get me wrong that there is an inherent inferiority complex and I have the greatest of respect for someone who spoke out of what is a common cultural milieu of its time, all I'm doing is pointing out this deficient mentality that prevents us from trying out new things for the fear of it being.... new!
6. We need something new, we need a new voice, and we need it now. And we need people with the gumption of going against the flow to achieve greater good, with the critical ability to speak for the rest to diplomatically negotiate for support and concessions whilst withstanding all kinds of 'excrement' and untruths being thrown at their deepest core. And all the while being unflinching slave of truth and sound principles. An unemotional malay.. fancy that.

Petronas's next frontier

Syria and Islam's dilemma

Syria: the foreign fighters joining the war against Bashar al-Assad http://gu.com/p/3aj49

What is solution for Palestine and Palestinians?

Making a call to expand Israeli hegemony based on logic such as this is unprincipled and immoral. The solution is to extend aid in all areas such that the Israeli occupation and colonisation is pushed back and the lesson that their bullying and power play has no place in this modern age.

Palestinians need a one-state solution | Ghada Karmi http://gu.com/p/3ahnh