My apologies for the lack of posting as I’m inundated with webinars and online conferences in the past month (along with other deadlines). However, I cannot let this interesting news (thanks to Biofuel Digest) about an online auction of unused process equipment from the former Verdezyne’s VerdePalm project in Johor, Malaysia.
While it saddens me to report this since I’ve covered Verdezyne’s progress for years, let me recap what the VerdePalm project was about. The VerdePalm plant, located in Johor and was owned by Malaysian Bio-Xcell Sdn Bhd, was originally earmarked for the production of industrial-grade dodecanedioic acid (DDDA) from ethyl laurate feedstock based on Verdezyne’s technology. The plant has a capacity of 6,000 tpa.
The construction of the VerdePalm plant started in 2014 and has ceased following Verdezyne’s closure in 2018 when the company’s investors led by Sime Darby suddenly pulled out of the project. Bio-Xcell filed for bankruptcy in 2019 and its 80 acres of land within the Southern Industrial and Logistics Clusters in Iskandar Puteri, Johor, has been put up for sale with an estimated value between RM140 million to RM160 million.
Bio-XCell’s receivership was driven by the termination of Verdezyne’s DDDA project. Bio-XCell entered into a 10-year build, lease and transfer agreement for the bio-based manufacturing plant. Bio-XCell was unable to meet its financial obligation to Maybank Islamic following Verdezyne’s liquidation. Construction of the VerdePalm project had a lump sum turnkey for RM275 million and Verdezyne received a financing package from Bio-XCell worth RM250 million for the project.
The age of the partially completed VerdePalm plant is said to be five years old. The equipment installed in the facility already includes fermenters, chemical storage tanks, acid pump, water pump, heat transfer and fluid flow system, air compressor and water cooling tower. Total cost invested in the partially completed facility was reportedly around RM100 million.
Interestingly enough, there was one company who was interested in buying the facility last year and turning it into a lactic acid production plant (as some of our readers know, the lactic acid market, especially in Asia, is very tight these days). However, the board of directors of this Malaysian investment firm, Solutions Group Bhd (SGB), decided not to proceed with their planned lactic acid investment. SGB and its subsidiaries are currently involved in several businesses such as in the design and development of various industrial equipment and software; provision of industrial automation solutions specialising in waterworks; production and distribution of industrial lubricants; provision of laboratory and industrial biotechnology solutions; and fabrication of various manufacturing equipment.
So, I guess this comes down to chopping up the VerdePalm facility and selling the equipment. One company in Asia that I know of that is a major DDDA producer could actually be interested in this auction since this company is investing in a new diacid facility, but this is another story to tell on the next issue of Tecnon OrbiChem’s Biomaterials newsletter.
The online auction will close on 22 October 2020 at 1400 Malaysia Time.
