If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.



Biobased Firms Ramp Up

Second quarter: Young companies are under pressure to raise capacity, get more financing

by Melody M. Bomgardner
August 19, 2013 | A version of this story appeared in Volume 91, Issue 33

A handful of publicly traded biobased fuel and chemical firms used second-quarter earnings reports to assure investors that they are on track. Although the firms operated at significant losses, all reported revenues from product sales. None, however, have succeeded in operating at commercial scale, defined as thousands of tons.

Solazyme, which makes its biobased chemicals from algae, sells tailored oils for the personal care market from its pilot plant in Peoria, Ill. The company said it is on schedule to start up its first commercial-scale plant in Moema, Brazil, late in the year and said a second large plant in Clinton, Iowa, would be completed in early 2014.

Morgan Stanley stock analyst Charles A. Dan says Solazyme’s revenues were higher and costs lower than expected. In a note to investors, however, he stressed that “the successful start-up and production ramp of the plant [in Brazil] remains one of the critical steps for the company.”

At Amyris, in contrast, the quarterly losses were greater than analysts had expected. The company sells its biobased farnesene, made from sugar, to chemical and fuel firms. Amyris is focused on increasing production at its facility in Brotas, Brazil. Unlike Solazyme, Amyris has very little cash to fund operations; it announced that a major investor has agreed to buy up to $60 million in bonds that can be converted into company stock.

Cellulosic biofuels producer KiOR said it is making significant progress at its commercial plant in Columbus, Miss., which uses woody biomass as feedstock. The firm shipped its first gallons of cellulosic gasoline during the quarter. EPA set its 2013 estimate of domestic cellulosic fuel output at 6 million gal, based largely on projected output from KiOR’s facility. But the company now says it will likely produce closer to 1 million gal.

KiOR said it may expand production at the Columbus site, and it has plans to build at a second location in Natchez, Miss. But it won’t be able to get financing until it has optimized its current operations, says Edward Westlake, an analyst at Credit Suisse. As he wrote to investors, “KiOR needs capital, and it needs it quickly.”



This article has been sent to the following recipient:

Chemistry matters. Join us to get the news you need.