Am I Next? Where will the biofuels shake-out point to now?

Two leading biofuels CEOs leave office in one week. Who’s next?

Our old friend, Brian Westlake, surfaces to explain the nuances, calm fears, stir troops to action, and detail the real story.

So my old pal Brian Westlake calls yesterday, after a long absence, and explains that he’s now investing deeply into industrial biotech.

“Bloody amazing, hey,” he tells me. “First Qteros knocks off John McCarthy and basically goes out of business. Now, Cobalt and Rick Wilson part company.”

Qteros, I gently explain, is signaling via new CEO Mick Sawka that they are still proceeding forward, much as ever.

“Aw, bollocks, matey,” Brian chuckled. “You’ve been fooled again. How are they going to make a go of it with eight blokes? It’s a fire sale.”

Really, I say.

Checking the diaper

“If I were an industrial biotech CEO, after McCarthy I would be checking my parachute. After Wilson, I would be changing my nappy. Or, what do you call it over in the States, changing my diaper.”

True, Wilson and McCarthy are as sharp as they come, truth-tellers, company builders. Their departures came as a surprise.

“Surprise? Jim, they’re complete shockers. But you keep thinking it’s about some stoush between the boards and the CEOs. Or some total failure in the executive suite, or another gasifier that failed.”

So, what does it have to do with, exactly?

The RMN factor

“Cobber, this is all about RMN.”

RMN? What’s that? Richard Milhous Nixon, I surmise, feebly. The Sage of Saddle River. Scourge of Alger Hiss.

“Ah, you’re the witless one. RMN. Raise Money Now. Get massively strong, immediately. That’s what this is all about.”

I remember that someone once said that money isn’t everything, but the absence of money isn’t anything.

“Jim, Jim, get a grip. It’s what John Hamer used to tell you. Raise as much money as you can, right now, the shake-outs coming, you want to be a survivor. Did you call John after you heard about Rick Wilson at Cobalt?”

Sure, I did. He told me that the change was about a unique opportunity to get Bob Mayer involved in Cobalt. After all, Bob was CEO of Genencor. That’s the kind of skill and experience, John said, that’s going to be needed for companies, like Cobalt, that have real opportunities to scale up. That the board concluded, as Bob got more involved with the company and the technology, his skills and talents couldn’t be best used if he were simply doing one day a week at the company, or on the board, but as chairman and CEO.

“Well, sure that’s what John’s going to say about the change. But you should have asked him about the real story. Which is not about changes in management. It’s all about getting stronger. Way way stronger. You dunno what the next year’s going to be like, mate, you’ve not been through this before.”

2012: A year like no other

A year of pain and suffering?

“Ah, you’re seeing it all wrong. It’s what Sukharno said in Indonesia back in ’65. It’s the year of living dangerously. For the weak, disaster. For the strong? Well, for those who bulk up on the management team, and raise, raise, raise, raise money, it could be better than a good year. It could be a vintage year.”

A vintage year?

“Bloody oath. To the victors belong the spoils. So now is not the time to be sentimental, now is the time to get strong any way you can. Be ruddy ruthless if you have to. Now, did you hear how ZeaChem has raised even more cash?”

I have now.

“Too right, they raised another $5 million in equity financing,  bringing the total to $64 million,  including $19 million last month. And its first biorefinery is set to come online on schedule next month in Boardman, Ore. That’s the way to do it. Network like bonkers, isn’t that what do you say?”

Network like crazy, that’s what I say.

“Yeh, yeh, you Yanks are a weird mob. Network like crazy.”

So, track down all the institutionals, the VC, the private equity guys?

From Russia With Like

“Matey, that’s not even close to the beginning, of the commencement, of the first step towards right. You used to be more clever. Think outside the box. Think outside of the outside of the box. High net worths, for example. Have you been following Russia?”

Not closely, no.

“Well, they are streaming out of Russia, high net worths. China too. It’s built around key individuals, not some faceless Pushkin Equity Partners or Dostoyevsky Capital. Your CEOs and their boards will have to be all over them.

“What about MLPs? Look at that guy Ramsbottom at Rentech, who pulled one off. Brilliant! What about sovereign wealth funds, family offices? Think REIT. Technology risk insurance. Tax credit financing. Get creative. Think bond offers. Who are those people you gab on about, doing that?”

Mark Reidy at Mintz Levin, John Kirkwood at Kreig DeVault, and John May at Stern Brothers.

BASF’s view

“That’s right, those blokes. But that’s only the beginning. Now, look at BASF. They practically spelled it out for you yesterday.”

Yep, the chairman, Kurt Bock, and a group of execs gave a press conference yesterday about their strategic direction, in London. I was in DC, missed it, what did they say?

“Only that they aim to grow 2 percentage points above chemical production and thus increase sales by an average of 6 percent per year until 2020. That’s a target of 115 billion euros. And they’re targeting emerging markets. And they are all over the sustainability angle. “Sustainability is becoming one of the main drivers of growth and value creation,” they said. Do you you need me to draw a map for you? They’re going to be looking at this sector to help them drive massive growth.”

BASF, I’ll write something about that. Thanks, Brian.

Intrexon’s move

“Ah, but that’s just the half of it. Look how the really smart companies are strengthening and broadening their boards. Just this week, Bob Shapiro and Jeffrey Kindler joined the Intrexon board. That’s the kind of thinking that wins!”

Bob Shapiro, ex-CEO of Monsanto. The King of Roundup Ready.  Jeff Kindler, the ex CEO of Pfizer. The King of Lipitor. Ah.

“Too bloody right, “ah.” Completely brills. Intrexon gets it. And then there’s Greenwood Energy.”

The pellet guys?

“Oh, they’re way beyond that now, though pellets they do well. They just snagged John Negroponte for their board.”

The former UN Ambassador?

“Too right. And John Podesta is over at Joule. That’s what the good companies are doing. Massively improving their boards, their management teams, and massively improving their balance sheets, and networking like crazy.”

RMN. Raise Money Now. I’ll remember that one.

“And while we are doing three-letter acronyms, remember that CEO stands for Cash Extraction Officer. Never forget that one, either.”

You’ve been talking to Hamer, too, I see. That’s one of his.

Back to the beach

“From time to time, matey, Someone’s got to watch your back. But I have to go now. Sunrise here in Sydney, and there’s a nasty left-hand break at North Narrabeen I have to try. Two-meter surf, unheard of. Me and the longboard have an appointment. Over and out.”

Ah, pure Westlake. Insight, interrupted by longboard surfing. There’s no combination quite like it.