Myriant files for IPO

Hope the blog’s US readers had a great Memorial Day weekend!

So here are last week’s big news that came out such as Solazyme’s successful IPO and Novamont to build a biorefinery/bioplastic in Italy. I also just finished writing an article about Dow Chemical’s successful pilot project on incinerating plastics for energy. This article will come out next week Monday on ICIS Chemical Business.

But let’s start today with Myriant’s big announcement on its filing for its own IPO.

The US-based bio-succinic acid producer filed its S-1 form with the US Securities and Exchange Commission (SEC) today for a proposed $125m IPO under NASDAQ (symbol “MYRT”) . The filing did not disclose how many shares the company plans to sell or the expected price of each share.

Of course, the blog always gets lots of good information on S-1. I also forgot that Myriant’s licensee Purac is already producing D-lactic acid in Spain using Myriant’s anaerobic fermentation process. Other recent partners announced include Davy Process Technologies for the production of succinic acid-based butanediol (BDO); and PTT Chemical for R&D collaboration as well as commercialization of Myriant’s technology exclusively within the ASEAN countries.

The company said it’s technology platform (combination of proprietary biocatalysts and fermentation process) can produce chemical intermediates such as succinic acid (a $7.5bn global market), fumaric acid ($1.7bn market), acrylic acid ($14.5bn market) and lactic acid (forecast to become a multi-billion pound market) using C5 and C6 sugars. Aside from BDO, Myriant is also looking at petroleum-based adipic acid and phthalic anhydride where succinic acid can be a drop-in or a replacement chemical.

Myriant, which is currently building its 30m lb/year bio-succinic acid plant in Louisiana, estimates that their biosuccinic acid will be cost-competitive with petroleum-based processes at $45/bbl of oil. The plant is expected to start in the first quarter of 2013. Myriant said the company plans to expand production to 170m lbs/year by the end of first quarter of 2014 (that’s news to me!). Also, the company is in the early stages of planning other production facilities in Germany and Asia.

“We have already scaled up our biosuccinic acid production 1,000 fold at the tolling plant owned by Fermic, S.A. de C.V., or Fermic, in Mexico City and have produced 24 tonnes of biosuccinic acid at this facility in support of internal testing and customer/vendor sampling and validation programs. The commercial scale-up of the Louisiana Plant represents a two fold scale-up of the fermentation already commercialized by Purac in the production of D(−) lactic acid based on our technology platform.” – Myriant

Another news to me is the memorandum of agreement with China National BlueStar Co. Ltd to develop a proposed jointly-owned 220m lb/year bio-succinic acid plant in Nanjing, China, and an agreement for exclusive supply of bio-suiccinic acid to BlueStar. The Chinese company is a BDO licensee of Davy.

To date, the company has not yet generated any significant product sales. Most of the revenues came from licensing royalties and government awards. The company reported a loss of $17.5m for the first quarter this year ending March 31. Myriant, however, expects its incoming succinic acid capacity in Louisiana to be “prospectively” sold out annually via committed customer contracts.

“We have signed contracts with three customers who have agreed to buy 100% of their succinic acid requirements from our 30 million pound Louisiana Plant. We are in discussions with prospective customers who have indicated interest in purchasing the biosuccinic acid that we would produce from the additional capacity created upon the expansion of the Louisiana Plant to 170 million pounds. ”

This is also the first time I’ve heard that there will be ammonium sulfate (AMS) co-product in Myriant’s bio-succinic acid manufacturing process. The company said it has entered into a contract with Wilson Industrial Sales to sell all of the AMS produced at the Louisiana plant. AMS is commonly used as a fertilizer.

With regards to feedstock, Myriant said it will transition to widely available, low-cost industrial sugars such as 95 Dextrose after completing start-up and operational trials on sorghum-based sugars at the Louisiana Plant. This sugar is derived from corn not sold for human consumption. Myriant said the sugar represents a more dependable and less cost-volatile feedstock than that used in other biobased production facilities.

And last but not the least, we also have to mention competitors in the bio-succinic acid market such as BioAmber, DSM (through joint venture with Roquette), and BASF. Myriant will also compete with Genomatica for BDO.

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