Hafnium Hafaway in S$20m tie-up with A*Star arm for specialty chemicals sub-sector

Singapore

SINGAPORE'S Agency for Science, Technology and Research's (A*Star) newly-rebranded commercial arm, A*ccelerate and private equity (PE)-backed Hafnium Hafaway will pump up to S$20 million to bring to market innovations in the specialty chemical sub-sector.

This is one of several partnerships unveiled between A*ccelerate and private investors that pool together over S$85 million in co-funding for the co-creation of 'deep-tech' startups in, among other areas, specialty chemicals, Internet of Things and artificial intelligence.

Hafnium's executive director, Francis Tan, said the PE firm "will fork out half" of the targeted S$20 million in co-funding, with A*ccelerate matching the other half. The intent is to jointly identify from A*Star's portfolio of intellectual properties for specialty chemicals, those that are "ripe for commercialisation". A*ccelerate and Hafnium would then "collectively finance the spin out and development of these technologies in up to 10 new ventures".

Mr Tan added that this co-venture, intended to run for less than five years, will focus on four specialty chemical applications with good market potential in Asia - adhesives, coatings, additives, oilfield chemicals, and advance polymers used in 3D printing, to name a few.

He further explained that using petrochemical output that's otherwise directly exported from refineries in South-east Asia to produce specialty chemicals can be more profitable. By his estimate, such specialty chemical products can generate in excess of 30 per cent in returns.

Consultancy firm IHS Markit projected that the specialty chemical market that was worth US$560 billion in 2017 would expand by 3.3 per cent annually in volume over the five years through to 2022. Hafnium is particularly keen on tapping the market potential in the larger Asia region excluding Japan and China, which accounts for about 15 per cent share of the global pie.

The PE firm has already brought in several European outfits with specialty chemical offerings to Singapore. Mr Tan pointed out that the latest partnership with A*ccelerate provides access to A*Star's portfolio of IPs that can help these European outfits customise their offerings for Asia and penetrate the region.

To date, A*ccelerate has roped in six other venture capitalists to co-create startups - Startup-O, Marvelstone, Trendlines, Dymon Asia Ventures, Origgin and JCS Venture Lab. Senior Minister of State for Trade and Industry Koh Poh Koon reiterated on the rebranding of A*Star's commercial arm that translating intellectual capital developed by public sector researchers into economic outcomes benefiting the country remains a key challenge today.

Tackling this challenge calls for A*ccelerate to continue to work closely with the industry, especially SMEs and startups that can benefit from A*Star's research outcomes, he said.

Some 197 local companies have taken up A*Star licences in FY17, up from 130 in FY13. About 74 per cent of A*Star licences to date have gone to local enterprises.