Novozymes today announced its 10% acquisition stake worth $115m in Beta Renewables — a cellulosic biofuel joint venture between Chemtex (a division of Italian plastic producer Gruppo Mossi & Ghisolfi) and investment firm TPG.
With this deal, Danish enzymes producer Novozymes and Beta Renewables have agreed to jointly market cellulosic ethanol using Novozymes’ Cellic enzymes and Beta Renewables’ PROESA engineering and production technology.
Novozymes said it will gain access to significant new business opportunities with the deal. Beta Renewables’ 20m gal/year Crescentino, Italy, cellulosic ethanol plant is expected to start by year-end 2012 with initial production of 13m gal/year using wheat straw, energy crops and other locally-available biomass.
“We expect Beta Renewables to be able to contract 15-25 new facilities within the next three to five years. The sales potential for Novozymes from these plants could be up to $175 million.” – Novozymes
Beta Renewables said it has also secured a deal to build at least one manufacturing plant in Brazil with GraalBio, and, recently, Gruppo Mossi & Ghisolfi received a $99m loan guarantee from the U.S. Department of Agriculture to construct Project Alpha, a cellulosic biofuel plant in North Carolina.
GraalBio is planning a 22m gal/year cellulosic ethanol plant in Alagoas, Brazil, using sugarcane bagasse and straw for initial feedstock. GraalBio said the cellulosic ethanol facility will be Brazil’s first. Construction is expected to start in July and start-up of operations is expected by the end of 2013.
GraalBio is also developing a new type of cost-competitive biomass called Energy Cane, a cross hybrid of sugarcane varieties with selected types of grasses producing low sugar content but high fiber. An experimental site in Alagoas is expected to produce 100,000 Energy Cane seedlings by the end of the year. The company is hoping to achieve productivity target of 100 tons of dry mass/hectare.
GraalBio said it will also expand the use of its Energy Cane biomass into the bio-based chemicals field. The company is also building a pilot plant in Campinas this year for the development of new biochemical pathways using PROESA. By 2017, GraalBio said it hopes to build five facilities for the production of biobased chemicals in Brazil using modified Brazilian yeasts.
“While the maturity of second-generation biofuels technologies in Brazil is materializing, the U.S. is building 29 biorefineries (BLOG NOTE: deduct one from BP’s exit plans…) for several products obtained from the conversion of cellulose. GraalBio is in negotiations with patent holders to license, purchase and apply industrial solutions in Brazil, and it will look for partners in Brazil in different areas, including co-development, supply of feedstock and new projects.” – GraalBio
Speaking of Brazil, Novozymes said it has also been looking for locations in the region to build its new enzyme manufacturing plants dedicated to support the country’s growing advanced biofuel industry.
“The location of new plants will, among other things, depend on where the industry is expected to scale up, where Novozymes’ partners are located, and where the best framework conditions exist,” says Peder Holk Nielsen, Novozymes VP.
According to an equity report released today by investment firm Jefferies & Company, Novozymes’ move to acquire a stake in Beta Renewables echoes DSM’s agreement to invest $125m in a cellulosic ethanol JV with POET and reinforces the logic behind DuPont’s acquisition of Danisco
“All three of the major enzyme producers now appear positioned to have integrated solutions for cellulosic ethanol production available in 2013-2014. Longer-term, we believe all three enzyme producers would prefer to avoid a “build-own-operate” model.” – Laurence Alexander, analyst at Jefferies & Co.
Here’s an interesting advertorial video from Beta Renewables about their PROESA process and recent activities…