Amyris lands more production, distribution agreements
If we were to suggest one additional product for the yeast-sorcerors at Amyris, it would be inks made from renewable biomass instead of petroleum. The company is signing production and distribution agreements so fast that, sticking to inks made from petroleum, they may well constitute a material threat to California’s oil supply.
We have lost count of the annual count of deals, and henceforth we may simply report them on the hour, every hour. 11 o’clock and all’s well, Amyris lines up another sell.
All kidding aside, there are records being set for renewable chemicals and biomaterials partnership, so let’s take a look at the latest.
Today, the company entered into a manufacturing agreement with Paraíso Bioenergia S.A., a renewable energy company producing sugar, ethanol and electricity headquartered in São Paulo State, Brazil. Under the agreement, Amyris will construct fermentation and separation capacity to produce Amyris products and Paraíso will supply up sugar cane juice from up to one million tons of cane, and other utilities; Amyris will retain the full economic benefits enabled by the sale of Amyris renewable products over the lower of sugar or ethanol alternatives. By leveraging Paraíso’s infrastructure and feedstock, Amyris expects to be able to begin production at the location in 2012.
The Paraíso-based operation represents Amyris’s fifth production agreement at locations spanning three continents. Amyris expects to begin contract manufacturing production this year in Brazil at Biomin GMBH, in the U.S. with Tate & Lyle Ingredients Americas, Inc., an affiliate of Tate & Lyle PLC and in Spain with Antibióticos. In 2012, Amyris expects to commence production at Paraíso and SMA Indústria Química S.A., Amyris’s joint venture with Grupo São Martinho. Amyris plans to produce Biofene™, Amyris’s renewable farnesene, at these facilities and then sell the farnesene directly to industrial customers or chemically finish it into a range of final products. Currently, Amyris is performing finishing under an agreement with Glycotech, Inc.
On the distribution side, Amyris announced a joint venture with U.S. Venture for the production, marketing and distribution of finished lubricants for the North American market. The joint venture would market and sell lubricants employing Amyris’s synthetic renewable base oils derived from Biofene. The parties aim to sign definitive agreements in the second quarter of this year.
The plans for the joint venture anticipate that U.S. Venture would contribute to the joint venture its existing regional lubricants business, known in the market as U.S. Lubricants, including products and customer relationships in the industrial, commercial and consumer segments. Amyris would facilitate access to a supply of its proprietary synthetic renewable base oils and formulations for a range of lubricant products using those base oils.
Amyris is working on the production of a complete line of renewable lubricants, including hydraulic, compressor, turbine and gear oil and grease, as well as 2-cycle and 4-cycle engine oil. The product line would be designed to provide No Compromise performance and equipment protection equal or superior to that of existing synthetic lubricants, while offering environmental benefits such as improved biodegradability and low toxicity compared to traditional petroleum-based lubricants.
What’s it all mean?
The oils and lubricants markets are tiny compared with, say, fuels, but they are not nothing, by a long shot. Globally, MRO magazine reports an overall size of $48.8B in 2010. Just a few points of market share would go far to justify Amyris’s fast-rising stock price, maybe even make it look cheap.
On the production side, 1 million tons of cane yields about 25 million gallons of sucrose. On an order of magnitude basis, based on what we know about Amyris’s yield, that could approach 50-85,000 tonnes of biofene or so, or somewhere in the range of $65-$110 million in sales.
Those are big numbers for a company just getting out of the gate, and provide a sense of why Amyris is generating so much sizzle amongst investors, so early in its path towards its ultimate scale.
Category: Fuels
