Verenium sees growth in improving commodity processes

09 May 2011 22:38  [Source: ICIS news]

TORONTO (ICIS)--Fresh off the sale of its biofuels business to UK-based energy major BP, US-based enzyme producer Verenium has returned its focus to value-adding intermediates, CEO James Levine said on Monday.

Speaking on the sidelines of the World Congress of Industrial Biotechnology and Bioprocessing in Toronto, Canada, Levine said that the company has no intention of selling commodities.

“The fundamental premise of the business is that [we have] a different way to discover and evolve enzymes, it produces superior-functioning enzymes, those will be our products, and we will target markets that reward differentiation,” he said.

Commodity markets do not value differentiation, but commodity producers do, if it improves their cost position, noted Levine, and the ability of enzymes to improve the efficiency of commodity production processes could dramatically increase Verenium’s revenues as well as the size of the enzyme market.

Levine offered the example of an enzyme that Verenium has developed for the soy crushing industry.

To remove gums from soy oil, crushers wash the crude product with water, then use a centrifuge to separate the two layers. But considerable oil is lost in the emulsion that forms, he explained. Verenium’s enzyme, a phospholipase C, breaks down this emulsion, liberating the oil for a yield improvement of at least 1.5% -- a major improvement in a commodity market.

Verenium has partnered with engineering firms Alfa Laval of Sweden and Desmet Ballestra of Belgium to bring the technology to market. Although the soy crushing industry has never used enzymes before, two of the largest crushers in the world have already adopted the Verenium technology, called Purifine PLC.

Each soy crushing plant represents a revenue opportunity of $750,000-2m/year (€524,000-1.4m), Levine said, and he estimated the total addressable market at $350m/year.

Verenium’s 2010 product revenues totaled $50m.

Other examples of such products included a phytase that, when added to chicken feed, eliminates the need to add phosphorus.

“We find that when commodity prices go up, it helps our business,” stated Levine.

Verenium’s enzymes promise “to decouple manufacturing costs from commodity costs,” he concluded. “That’s important, and it’s something we have done for several industries. It’s very much about responding to high commodity prices with greater efficiency.”

Read Paul Hodges’ Chemicals and the Economy blog

($1 = €0.70)

By: Clay Boswell
+1 713 525 2653

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