Biofuels executives project 3.3% job growth, 7.8% revenue growth in 2012-13: Biofuels Digest/BIO poll

July 16, 2012 |

Industry mood darkens on government programs, IPO window; optimism on biobutanol rising.

In Florida, Biofuels Digest reports that 68 percent of bioenergy executives are more optimistic both about their organization’s prospects for growth and industry growth, than 12 months ago, and that 61 percent are more optimistic about the industry’s prospects than at this time in 2011.

Industry job growth was projected at 3.3 percent for the next 12 months, and industry revenue growth at 7.8 percent.

The findings were among the highlights of the Q2 2012 Bioenergy Business Outlook Survey conducted by the Biofuels Digest and co-sponsored by the Biotechnology Industry Organization (BIO). The quarterly survey drew responses from 590 industry executives, up slightly from the Q1 response.

Highlights from the survey include:

Revenue growth

Respondents said that they expect their firms to grow by a median 7.5 percent over the next 12 months, down from a median of 8.6 percent in the Q1 survey.

Industry revenue is expected to grow 7.8 percent, down from 9.0 percent in the Q1 survey.

IPO and merger activity

36 percent of respondents said that they expect to see more completed IPOs in the next 12 months, compared to the past 12. In the Q1 survey, 57 percent of executives thought that IPO activity would increase, and 74 percent held this view at this time last year. 75 percent of respondents said that they expected to see more mergers and consolidations in the next 12 months.

Markets

Respondents, asked to cite the markets outside of their home country which were key to their growth, cited the US (41 percent), Brazil (38 percent), the EU (39 percent) and Canada (33 percent). These were broadly in line with Q1 results, although prospects for development in South Asia and the EU have dropped over the past year.

Job growth

The median job growth rate expected, over the next 12 months, is 3.3 percent, down from 4.2 percent in the Q1 survey.

Financing

46 percent of respondents tried for new financing in the past 12 months, and 53 percent of those who attempted financing were successful. 56 percent of respondents said that they would seek new financing in the next 12 months. These are in line with results from the Q1 survey and from last year’s Q2 survey.

Growth drivers

49 percent said that rising demand for alternative fuels was an important driver for their growth over the next 12 months, while 41 percent said that new technology was a growth driver for them.  26 percent credited new partnerships, 26 percent pointed to new finance and 15 percent to more aggressive marketing. In the Q1 survey, a sharply higher figure, 55 percent, has cited rising demand as a growth factor.

Policy

Generally, respondents were more pessimistic about the impact of government policies on industry growth.
69 percent rated their national government attitude toward bioenergy as “highly or moderately supportive”, compared to 63 percent in the Q1 survey. 22 percent of respondents said their national governments attitude was “moderately or very unsupportive”, up from 18 percent in Q1.

Among preferred policies, 30 percent pointed to carbon price legislation, 43 percent to increased incentives, and 31 percent to production or investment tax credits as strong industry drivers in the next 12 months; in Q1, the figures for these drivers were 37 percent, 42 percent and 32 percent, respectively.

Only 26 percent pointed to better loan guarantee programs, and 19 percent to blender pumps assistance, as growth drivers, down sharply from 2011 results.

Fuels

Among fuels, 51 percent of executives said they expect renewable diesel to reach 1 billion gallons in global capacity by 2020, narrowly ahead of cellulosic ethanol at 50 percent.

Other fuels that were expected to break the billion gallon barrier by 2020: and aviation biofuels at 44 percent, down from 47 percent in the Q1 survey and 49 percent a year ago. Algal fuel was rated at 20 percent, compared to 28 percent in the previous poll, and 30 percent a year ago.

Respondents were increasingly bullish about biobutanol, which 31 cited as expected to reach the billion gallon threshold by 2020, compared to 22 percent in the Q1 survey.

Complete survey results

Complete survey results are available here – and include comparisons to the same questions from the Q1 2012 survey, and the Q2 2011 survey.

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