Genomatica files for IPO

The market may be in upheaval but that doesn’t deter renewable chemical company Genomatica from filing an IPO (initial public offering) worth up to $100m on the NASDAQ stock exchange today.

 Source: Buckingham Research, ICIS

The green blogger was out on vacation last week and so was not able to post Genomatica’s recent announcement on its joint venture with Italian bioplastic producer Novamont and its milestone in producing bio-butadiene. The blog, however, already speculated a long time ago that Genomatica seems to be intent on filing an IPO this year as well.

Under Genomatica’s S-1 filing on the US Securities and Exchange Commission (SEC), the company reported a loss of $9m for the first six months this year compared to a loss of $6m in the same period in 2010. The company said it has accumulated a deficit of $43.5m as of June 30, and had not yet generated any revenue on biobased chemical sales. 

“We expect to continue to incur substantial and increasing net losses for the next several years, in particular as we seek to scale up our butanediol (BDO) process toward commercialization, expand our research and development efforts and transition to a public company.”

That’s the bad part. The good news is that Genomatica plans to start commercial production for its first biobased chemical BDO by the end of 2012 under the Novamont joint venture. Novamont would provide all the capital to convert, build and operate the 40m lb/year (20,000 tonnes/year) bio-BDO plant in Italy, and the company will also consume the BDO for captive use. Genomatica will have an option on a portion of the BDO production and will also share a specified percentage of any losses from the production and sale of BDO at the plant.

The company plans to initially produce its BDO using conventional sugar derived from corn, sugarcane, sugar beets and cassava.Genomatica is already producing demonstration scale BDO using dextrose sugar in a 13,000 liter fermentation tank owned by food ingredients producer Tate & Lyle in Decatur, Illinois.

Genomatica also plans to produce bio-BDO in Asia through its joint venture with Mitsubishi Chemical. The company did not announced planned capacity, timeline for construction or location of the Asian plant although Mitsuibishi Chemical said it plans to use bio-BDO in the future for its planned 20,000 tonne/year polybutylene succinate (Pbs) facility in Thailand, which will start in 2015. Genomatica reported on the S-1 filing that its goal is to begin high volume bio-BDO production in the US, Europe and Asia in 2014 and 2015.

The bio-BDO plants are expected to each have a capacity of between 100m-130m lb/year depending on regional market dynamics, and supply and demand factors. Genomatica estimates a bio-BDO plant using its processing design will cost 30%-60% less to build compared to similar sized plant using conventional competing process (Reppe process, butadiene-acetic acid process, Davy process, propylene oxide process, and Geminox process).

The company also formed a joint development agreement in April with Chemtex, a subsidiary of Italian PET producer M&G (Gruppo Mossi & Ghisolfi), to construct a bio-BDO demonstration facility in Rivalta, Italy, using cellulosic feedstock. Genomatica said it is also working with M&G for possible developments of other sugar-based chemicals.

Genomatica revealed last week its intent to enter the bio-butadiene market when it successfully produced pound quantities of the C4 chemical. For more on bio-butadiene development, check out my recent bio-based rubber chemicals article on ICIS Chemical Business.

According to Genomatica, this development is still at an early stage. No other information was disclosed on this project but my ICIS colleagues found this link on various methods in producing renewable BD from sugar fermentation. One possible route is the fermentation of sugars to 1,4 BDO and subsequent dehydration to 1,3 BD.

In summary, here are Genomatica’s recent partnership deals:

Partner
Feedstock(s)
Chemical(s)
Relationship
Tate & Lyle
Conventional sugar
BDO
Joint development agreement
Jointly operate plant at demonstration scale, with the potential for commercial-scale production in North America pursuant to a contemplated joint venture agreement
Tate & Lyle to supply dextrose sugar feedstock for initial commercial-scale plant in North America
Novamont
Conventional sugar and sugar from cellulosic biomass
BDO
Letter of intent
Build first commercial-scale BDO industrial plant in Italy, with a capacity of approximately 40 million pounds per year, to begin production by the end of 2012; Novamont to provide all construction capital and consume all product off-take for captive use
Potential to build second commercial-scale BDO plant in Italy, at substantially higher capacity to meet Novamont internal demand; Novamont to provide majority of construction capital and consume product off-take for captive use
Mitsubishi
Chemical
Conventional sugar
BDO and undisclosed
Memorandum of understanding
Explore commercial production of BDO in Asia
Explore production of additional chemicals
Strategic investment in our company
M&G
Sugar from cellulosic biomass
Undisclosed
Memorandum of understanding
Explore production of additional chemicals
Chemtex
Sugar from cellulosic biomass
BDO
Joint development agreement
Develop integrated process for sugar from cellulosic biomass to BDO at demonstration scale
Right to enter into exclusive license to use PROESA process for BDO production
Waste
Management
Syngas
Undisclosed
Joint development agreement
Develop integrated process for syngas to a particular intermediate chemical
Explore production of additional chemicals
Strategic investment in our company

addthis_pub = ‘greenchicgeek’;

Leave a Reply