Industrial Biotechnololgy Innovation Centre (IBioIC)
Translating promise into profit…
Industrial Biotechnology Innovation Centre IBioIC)
WHERE: Glasgow (Inovo Building)
FUNDING: £10 million (initial investment)
WHO: 14 Scottish universities and 46 industry members
Translating promise into profits
Industrial biotechnology is not yet part of everyday vocabulary, but it promises to transform our everyday life and become a huge part of the global economy, changing the way we produce many chemicals and pharmaceuticals, fuels and manufacturing materials. It also promises to play a major role in what is called the “circular economy,” helping to extract the maximum value from all our resources, including waste, industrial by-products, feedstocks and timber. And the Industrial Biotechnology Innovation Centre (IBioIC) is aiming to put Scotland on the map as a leader in this revolutionary science – and make the Scottish industry a billion-pound business within the next ten years.
Recent advances in science such as genomics and synthetic biology are starting to rewrite the rules of industry, including new techniques for manufacturing and processing, waste management and energy. And Roger Kilburn, the CEO of the Industrial Biotechnology Innovation Centre (IBioIC), thinks that Scotland has the potential to play a major role in this emerging global business, because it has the companies, researchers and resources, as well as the infrastructure needed to support it. Translating that potential into economic impact will not be easy, but the process has already begun.
In many ways, the IBioIC has achieved more than expected since it started operating in early 2014, getting several major projects off the ground and steadily building its membership base (companies pay up to £50,000 per year to join). It has also revised its projections since then, seeing greater opportunities in terms of market growth but also expecting the growth to be slower.
According to Kilburn, Scotland scores highly in many key aspects of industrial biotechnology:
1 availability of feedstocks, raw materials and industrial by-products;
2 a world-class life sciences and pharmaceuticals industry, and world-class research
3 a strong petrochemical industry, including large refinery and chemical processing
4 marine resources (including aquaculture) and a strong renewables sector;
5 a supportive regulatory environment – clear, understandable and ethical;
6 good utilities and infrastructure;
7 a growing specialist skills base.
This combination of natural resources, industrial experience and scientific expertise puts Scotland in an excellent position to be a major force in industrial biotechnology, but Kilburn recognises there are still major challenges lying ahead; which the IBioIC is meeting head-on.
Progress so far
Several industrial biotechnology projects have recently been launched in Scotland, including innovative work by Celtic Renewables and Horizon Proteins (a spin-out from the Heriot-Watt University), using by-products from distilleries to create new biofuels and feedstuffs for fish farms; and Scotland’s first biorefinery, set up by CelluComp in Fife, producing new materials for paints and coatings, paper and packaging and personal care products from vegetable waste such as carrots and beets.
One of the biggest successes so far for the IBioIC is a project led by GlycoMar, a biotechnology company based in Oban. In partnership with Norway's MicroA, GlycoMar has set up a new joint venture called Prasinotech to produce high-value polysaccharides from microalgae, for use in skincare cosmetics. This will involve industrial-scale cultivation and processing of the patented polysaccharides, taking advantage of MicroA’s photobioreactor technology. Full-scale production is expected to begin within a year.
The project was one of the first to emerge from a competition organised by the IBioIC soon after it was set up in January 2014. It was also completed within 12 months, in collaboration with researchers at the Scottish Association for Marine Science (University of the Highlands and Islands), the University of Edinburgh and the University of Strathclyde, and was jointly funded by the IBioIC, Innovate UK and Innovation Norway.
For Kilburn and his team, the project was a “leap of faith” in many ways, because it is so hard to tell if any project will be a commercial success. Successful candidates usually know from the start which academic researchers they want as their partners, however, and Kilburn explains that the idea is to get the universities to see things from an industry perspective. “Companies ask for nothing that won’t create value,” he says, and sometimes they are seeking innovation in areas new to researchers. Another key role played by the IBioIC is to help draw up the contract between all the partners, making sure the process is open, transparent and fair. Good governance is critical, says Kilburn.
Other highlights include a project by Ingenza to “make biotechnological protein expression more predictable through the proactive management of cellular translation;” and another project, also by Ingenza, to use engineered bacteria “for the scalable biosynthesis of products traditionally made from petrochemical-starting materials.” Another global leader, GSK, is using synthetic biology principles to develop a new biochemical route to an important starting material for manufacturing of antibiotics.
The competitions run by IBioIC are open to its members and partner universities, inviting them to apply for funding to help projects get closer to commercialisation. According to Kilburn, some smaller companies may have lost out in the first round of some competitions but still have commercial potential, so the IBioIC has set up a new competition for micro-companies (turnover of less than £1 million a year and less than ten employees) – one of three scheduled each year.
After projects are selected, the next stage is to satisfy the technical advisory board, then the commercial advisory board, who assess every project according to a pre-set template (for example – is it new, is there a market, can the product be delivered fast enough?), but there is no guarantee any project will be a success. Initially, the target was to demonstrate commercial benefit within 12 months, but Kilburn says this will be relaxed in the future to enable a greater number of projects to become eligible; although “quick wins” that prove impact early will always be welcome.
The IBioIC deals with a wide range of organisations, from micro-companies to global corporations, but it takes the same approach to every project, large or small. The multinationals may have more demands on their time, and handle much more complex long-term projects, but they are not necessarily better or different in terms of big ideas or attention to detail. The big difference is the financial commitment – it takes a lot of money to build a new plant, designed to operate for several decades.
The industry timescale will always be one of the challenges faced by new projects, no matter how big or how small. The IBioIC tries to steer Scottish companies through what is known as the “valley of death”; after proof of concept, the difficult and expensive stage is to prove that the process will work and scale up to commercial requirements. For example, GlycoMar knew early on that the new microalgae had enormous potential, but did not know if it made economic sense until they had tested the process on a much bigger scale. Kilburn says that the GlycoMar project was started and completed very quickly, but points out that some major industry projects can take many years. His former company, ICI (now Lucite), spent 12 years developing new ways to make Perspex monomer, using chemicals including hydrogen cyanide, and is now exploring the “biological route” to production. It may take two years to develop the basic manufacturing process, says Kilburn, but another eight years to perfect, including the construction of a pilot plant. “Large-scale innovation develops very slowly,” he adds, citing the example of the Forestry Commission, which has to think ahead for several decades. Big projects also require more attention to optimisation; extracting as much value as possible by improving every aspect of production.
Kilburn is a great enthusiast for industrial biotechnology: “The 20th Century saw the industrialisation of chemistry,” he says, “and the 21st Century will see the industrialisation of biology.” But even though industrial biotechnology may be the next revolution in science and technology, Kilburn is cautious about estimating the economic impact of the industry – or the long-term economic impact of the IBioIC. “We revised our five-year plan,” he says, “one year after setting up the centre. We think it represents a bigger opportunity than we first described, in terms of overall activity, but economic impact is still hard to measure. We are focused on activities and outcomes, and believe we are beginning to gather momentum, but our methods have not changed, despite the fact the industry is growing even quicker than expected. It was worth about £230 million last year, compared to earlier predictions of £200 million, so we are well on track to reach £400 million by 2020, and we are targeting £1 billion in another five years.”
Kilburn also says that the IBioIC has not spent as much of its budget as planned. “It’s a slow-burning fuse,” he explains. “Many projects require significant high-risk investments, and this requires caution and long-term perspective.”
On the other hand, says Kilburn, the cumulative benefits could be enormous: “Success breeds success – if a project works, it tends to grow and lead to additional projects.”
The expanding supply chain
There may not be thousands of companies in Scotland queuing up to get involved in industrial biotechnology, but Kilburn believes there are many companies who should be part of the supply chain but just don't know it yet. Some people may think the sector is part of the chemical space, but agricultural companies, primary food producers, utilities and waste management companies should also be checking out what they can do. For example, several local authorities use waste to generate power and could manufacture higher-value chemicals from the same materials. The paper industry may have declined, but trees still have significant value in many other new applications and could ultimately replace our requirement for fossil fuels to manufacture chemicals.
“If we want to build a £1 billion industry by 2025, we will need big investors,” says Kilburn, “but we also need a lot of smaller companies, including micro-companies.”
Like so many other innovation sectors, industrial biotechnology calls for a culture change, not just in business or academia but also the general mindset. The chemical companies see the potential of industrial biotechnology, and more and more people are beginning to recognise the value of the circular economy, but everyone will have to be prepared for a long-term commitment; especially because it is so hard to forecast the future. For example, says Kilburn, the original reasons for setting up the petrochemical complex at Grangemouth are no longer valid today. Ninety years ago, West Lothian shale oil was processed at Grangemouth and exported by ship. Later, it became a port for importing oil – until the tankers grew too big to navigate the Forth. Then it became the end of the pipeline from the oil fields in the North Sea. And soon it could become the hub of Scotland’s industrial biotechnology sector; and go on for another 90 years in its new incarnation.
“That's the power of the chemical industry,” says Kilburn. “The feedstock (e.g. oil) may change, but not the location.”
The success of Grangemouth could also have a knock-on effect, as one new development follows another, but Kilburn also believes other sites will be set up all over the country, close to sources of materials such as timber, biomass and waste.
At the same time as promoting the sector in Scotland, Kilburn is aware that the general public will take time to appreciate its value, in economic terms and social impact, as well as in healthcare. “To some extent we operate under the radar,” says Kilburn. “As time goes by, industrial biotechnology will be subsumed into the circular economy, as one of the clever technologies making it work.”
Although the IBioIC focuses on Scotland, it also has its sights set overseas, and works with Scottish Development International (SDI) to promote the industry here and encourage inward investment. Kilburn strongly believes that Scotland offers an ideal location for industrial biotechnology ventures, but also thinks “we should be better at making that compelling case” to decision makers in other countries. To support this effort, the IBioIC will commission feasibility studies for feedstocks, says Kilburn. “We know they are available in volume and we know what they are,” he explains, “but we need to establish how competitive they are.”
Fiscal measures such as incentives (e.g., tax breaks) could be a major attraction to inward investment, but Scotland faces the same challenges as other countries in Europe. It is hard to compete with countries outside Europe which offer an 80% guarantee on loans up to $250 million, says Kilburn, “so we need to work harder to optimise investment opportunities.”
The big question for multinationals thinking of setting up operations in Scotland is “how much do they want to be here?” says Kilburn. “We have plenty of suitable sites and resources, but this is a highly competitive and global business, so we have to do more.”
Another future target is to open the second industrial biotechnology equipment centre at Heriot-Watt, to facilitate the scale-up of processes for biotechnological production. The first equipment centre, based in Strathclyde, is for rapid screening of new microbes; it is easier to generate new bugs than test their effectiveness. The “plug and play” approach enables companies to use the equipment they need, so they can make better use of their funds.
In terms of specific research, Kilburn hopes there will be breakthroughs in studies of lignin, a complex polymer which provides the structure in wood and many plants. It’s easy to burn wood, or convert the cellulose to sugars, but to find a high-value use for lignin is the “Holy Grail” of biotechnology.
New skills supply chain
Facilitating innovative projects and promoting the industry at home and abroad will continue to be priorities at the IBioIC, but Kilburn and his team think their biggest contribution so far is to boost education in their specialist subject, including setting up an MSc in Industrial Biotechnology and funding PhDs – a total of 19 over the last two years. An HND programme will start in August. The MSc students must spend three months of their time in an industry placement and, as a result, two-thirds of the first group of 17 graduates had jobs before they had finished their courses, with companies including GSK and Ingenza.
“We need new skills,” says Kilburn, “and we set up the Collaborative MSc programme in less than eight months.” Some skills required are generic but some are very new; for example, knowing how to design a new bioprocessing plant.
About 90% of all the chemicals we use today are based on petrochemical derivatives, but as industrial biotechnology gathers momentum, these building blocks will be replaced by “fermentation equivalents,” according to Kilburn. If Scotland continues to turn out a new generation of industrial biotechnologists, some of those new products could become as celebrated as the country's other fermentation favourite, whisky. And Kilburn would be first to toast that success.
The IBioIC has identified five major themes:
1 Sustainable feedstocks (including unconventional gases as well as marine and
2 Enzymes and biocatalysis/biotransformation;
3 Cell factory construction and process physiology;
4 Downstream processing;
5 Integrated bioprocessing.
Supported by Scottish Enterprise (SE) and Highlands & Islands Enterprise (HIE), the new Industrial Biotechnology Innovation Centre was set up to “harness the combined intellectual horsepower of Scotland’s higher education institutes and create a single portal for industry.” It also aims to “accelerate and de-risk the development of commercially viable, sustainable solutions for high-value manufacturing in chemistry-using and life-science sectors.”
Visit the IBioIC website: www.ibioic.com