29 October 2012

Denmark-based Novozymes to acquire 10% stake in Beta Renewables for $115 million

- Strategic partnership in the cellulosic biofuel market 

29 October 2012 - Novozymes, the world’s largest producer of industrial enzymes, and Beta Renewables, a global leader in cellulosic biofuels and part of Gruppo Mossi & Ghisolfi, today announce an agreement to jointly market, demonstrate and guarantee cellulosic biofuel solutions. As part of the agreement, Novozymes will acquire a 10% share in Beta Renewables, paying approximately $115 million cash for the equity, marketing fees, other intellectual property rights and milestone payments.

The partners will offer customers looking to produce biofuels from agricultural residues, energy crops and other cellulosic feedstocks a combination of Novozymes’ Cellic® enzymes and Beta Renewables’ PROESA™ engineering and production technology. Beta Renewables will embed Novozymes’ enzymes in the PROESA technology and guarantee biofuel production costs upon start-up of customers’ cellulosic facilities. The deal is unique in offering a combined solution that reduces the risk in customers’ projects while providing competitive commercial terms. 

“This type of complete offering will significantly de-risk cellulosic biofuel projects financially as well as technologically for our customers,” says Beta Renewables’ Chairman and CEO, Guido Ghisolfi. “It will make cellulosic biofuel projects bankable and accelerate large-scale commercialization of the industry.”

Large-scale commercialization of cellulosic biofuels is taking off, and this is a fantastic opportunity for Novozymes,” says Peder Holk Nielsen, Executive Vice President at Novozymes. “Beta Renewables is an extremely committed industry front-runner. They are building advanced biofuel facilities all over the world and, by being their preferred enzyme supplier, Novozymes will gain access to significant new business opportunities. We expect Beta Renewables to be able to contract 15-25 new facilities within the next three to five years. The sales potential for Novozymes from these plants could be up to $175 million.”

In the last five years, Beta Renewables has invested over $200 million (€140 million) in development of the cost-competitive PROESA process. PROESA is the same technology that will be used at the world’s largest cellulosic ethanol plant in Crescentino, Italy, where operations are expected to start by the end of 2012. The plant will initially produce 13 million gallons (50 million liters) of ethanol per year from wheat straw, energy crops and other locally available feedstocks. It has a design capacity of 20 million gallons (76 million liters) per year.

Beta Renewables has also secured a deal to build at least one manufacturing plant in Brazil with GraalBio, and, recently, Gruppo Mossi & Ghisolfi received a $99 million loan guarantee from the U.S. Department of Agriculture to construct Project Alpha, a cellulosic biofuel plant in North Carolina.

Novozymes is the world’s leading supplier of enzymes to the biofuel industry. The Denmark-based biotech company’s Cellic enzymes enable cost-efficient conversion of biomass to ethanol and are broadly regarded as the industry benchmark.

Beta Renewables is the leader in making non-food cellulosic biomass practical and cost-competitive for the production of advanced biofuels and biochemicals. Beta Renewables is a unique $350 million (€250 million) joint venture formed from the Chemtex engineering division of Gruppo Mossi & Ghisolfi, and TPG. The M&G Group is one of the world’s leading producers of PET resin and is Italy’s second largest chemical company. The Group has operations in Brazil, Mexico, China, India, the USA and Italy. 

Source: Novozymes