Thank you, Mr. Chair. Thank you for the opportunity to testify before the panel.
I will start by giving an overview of CelluForce and our product, cellulose nanocrystals. I will also offer some comments regarding the challenges in commercializing and producing new and advanced bioproducts. I will conclude with remarks about the role of the federal government in supporting new biomaterial companies, thus developing the Canadian bioeconomy.
I'll start with some words about CelluForce. We are the world leader in the production of cellulose nanocrystals, also called CNC, a high-value-added material that comes from wood. CNC is actually what gives wood its strength. It is stronger than both kevlar and carbon fibre. It is also a functional material due to its charges on the surface. Our technology is based on research that started in the late 1990s at FPInnovations.
Our head office is in Montreal, and our demonstration plant is in Windsor, Quebec. The company was founded in 2011, with Domtar and FPInnovations as the initial shareholders. That year, we also started the construction of our demonstration plant, which was completed in 2012.
The technology attracted foreign investment. In 2015, Houston-based Schlumberger became a shareholder in order to jointly develop CNC applications in oil well services. Similarly, Fibria, the Brazilian eucalyptus pulp producer, also joined our shareholders and became our distributor in Latin America in 2016.
The year 2017 was the first year we had commercial sales, and we are aggressively developing applications for continued commercial success.
I will now offer some comments regarding commercializing and producing an advanced bioproduct.
First, we recognize that we are in a privileged situation. Not many biomaterial start-ups have the benefit of having a demonstration plant that can produce industrial quantities of material. This has proven to be invaluable in the development of customer applications. We can thank the foresight of our founding shareholders, Domtar and FPInnovations, as well as the financing from government institutions to FPInnovations for the fundamental research necessary to develop our technology.
Indeed, the investment in a demonstration plant is an important step in de-risking a production process. The process is capital intensive, and industrials as well as venture capitalists are quite reluctant to invest. The demonstration plant is often the first step in process development, and most improvements are also very capital intensive.
Another point I want to highlight is that the commercialization cycle for new material is quite long. This echoes what Rod talked about. Often industrials as well as funding agencies don't expect the process to take so many years. If you take PVC, for example—polyvinyl chloride—the material was developed in the early 1950s. It wasn't until the mid 1960s that it began to be widely adopted and significant revenue streams generated. We are living this challenge on a day-to-day basis and put significant energy to shorten the adoption cycle of CNC.
A significant amount of research and development as well as customer support and interactions are necessary to drive applications to a commercial status. One of the difficulties we face here in Canada is that there is very good academic and technical support for fundamental research but not for application development. We often need to deal with American or European institutions for this type of work. For example, the use of CNC in bioplastics and biomaterials is underdeveloped in Canada. We are currently engaging with institutions in the U.S. and Europe for this activity.
I will now comment on the role of the federal government in supporting new materials companies and developing the Canadian bioeconomy. One key concept I wish to bring to the committee's attention is the concept of helping in the process of de-risking. This is where, in my opinion, the federal government can have the greatest impact. This applies to research and development, production process development, application development, and commercialization. I will give you some examples of where there is some support.
Funding for institutions such as FPInnovations does indeed de-risk research and development. Regarding application development, the federal government has an important role to play by supporting programs such as Sustainable Development Technology Canada, SDTC. As a matter of fact, CelluForce participated in an STDC-funded project with Schlumberger in 2015, which led to commercial product launches in 2017. This accelerated the application to development time, but it still took two years. Additional funding to other programs and institutions specifically for the development of customer applications would also be very beneficial.
Other examples of de-risking are programs such as the investments in forest industry transformation, or IFIT, program. This helps companies such as CelluForce develop their production process and cross the valley of death.
My final example of de-risking involves supporting commercialization initiatives by funding organizations such as NanoCanada. CelluForce has a product that is both a biomaterial and a nanomaterial, and NanoCanada has been instrumental in supporting CelluForce in our international commercialization efforts by offering shared booth space in international nanotechnology conferences and exhibitions. Not only are the logistics taken care of by NanoCanada, but they also closed the loop with Canadian embassies and trade commissioners. Continued funding to NanoCanada will greatly help CelluForce, and I would also recommend a similar approach for bioeconomy companies.
To conclude, I strongly believe that CelluForce is on its road to success and will contribute to the economy of Canada; namely, by creating high-paying manufacturing jobs. However, we're still facing many challenges. Continued support from the federal government in de-risking the activities that are inherent to biomaterial companies will greatly contribute to our success.
Thank you.