In California, Solazyme announced today the execution of both a joint development agreement and a letter of intent with Dow Chemical, to use Solazyme’s algal oils in next generation, bio-based dielectric insulating fluids key to transformers and other electrical applications.
Under the terms of the joint development agreement, Dow will combine its knowledge of specialty fluid formulations and dielectric insulation capabilities with Solazyme’s feedstock capabilities to develop of a new class of algal oils tailored for optimized performance and cost in dielectric insulating fluid applications.
The non–binding LOI provides that Dow may obtain up to 20 million gallons of Solazyme’s oils for use in dielectric insulating fluids and other industrial applications in 2013 and up to 60 million gallons in 2015.
Solazyme Chief Executive Officer and Co-founder, Jonathan Wolfson, said: “Dow is a world-class organization with enormous research, production and commercialization expertise in a broad range of high-value and high-growth chemical sectors. In this initial joint effort Dow and Solazyme will work to tap into the >500 million gallon dielectric insulating fluids market with novel and breakthrough bio-based solutions. In parallel we are working with Dow to explore the use of Solazyme’s algal technology and oils in a wide variety of products that Dow commercializes worldwide, to help provide high performance, environmentally sustainable and cost competitive solutions to a broad set of end users.”
Dow Wire & Cable General Business Manager Tim Laughlin, added: “Solazyme is a leading company in the industrial biotechnology space and its renewable oil technology platform provides a unique opportunity to significantly improve the next generations of chemical solutions.”
The Digest’s Take
Most readers will have to look up exactly what a dielectric insulating fluid actually is and does – we sure did. That there is a 500 million gallons market for it – well, that’s not nothing. We’re not a bit surprised that Solazyme has come up with a way to use their oils for yet another interesting market – though this comes more out of the couture side, rather than the mass-market, ready-to-wear side of the growing Solazyme product portfolio.
With 60 gallon deliveries scheduled as soon as 2015, it is becoming high-time for even a “first-the-walk-then-the-talk” outfit like Solazyme to lay out some more public plans, for how it is going to produce all of these products without depending on rented fermenter time. Presumably they have laid it out to Dow.
But we expect that all of that will be sorted out in the capital raise that is now getting underway, and that will be based on the broad stream of offtake contracts that Solazyme is signing with a set of well-known and credit-worthy customers.
We don’t expect that this will be the last word on collaboration with Dow, either. Stay tuned.
More background on the story from the Digest
Category: Producer News