Biofuels Venture in crisis? Check ordering, design changes, capacity reductions

December 18, 2012 |

Investors, policy-makers, supply-chain partners, observers – so many stakeholders ask the same question – how do you really know when your favorite biofuels venture is having real trouble as opposed to a non-material slowdown or hiccup.

But not every venture is far enough along or transparent enough to offer classic data for analysts or the adventurous private investor.

How do you tell – what are some tell-tale signs that, from the outside, can tip you off that you “got trouble, right here in River City.” Let’s look at 12 Signs, 7 through 9 here below.

7. Sudden ordering of antibiotics, solvents, cleansers, peroxide, autoclave equipment.

Another tell-tale sign of contamination – are the staff using a lot of antibiotics or other cleansing or bleach products? A sign of trouble and also that trouble is hard to pin down. Could be that they are trying to get rid of pests, predators, parasites, competitors, or some dread other unwanted microbe.

8. Design changes in reactors, fluidized beds, fermentation process, post-pilot.

The purpose of a pilot is generally to validate the performance of some of the equipment at sub-optimal scale. Wholesale design changes, while announcing a move to “demonstration scale” can indicate that the venture is rushing it – upping the risk. Moreover, its a sure sign that “off the shelf” is “out the window” and can be a sign of higher than expected costs.

9. Capacity reductions.

A classic sign. A 10 million gallon project suddenly gets downshifted to, say, 6 million. No matter what they tell you, the money was raised based on an assumption of 10 million. Generally can indicate that rate, titer or yield is off in the process – or that the catalyst isn’t generating the desired activity rates. Or that enzyme loads are prohibitive.

Wait! There are more signs. Check them out.

EXTENSION: Biofuels Venture in crisis? Check layoffs, project delays, truck counts

EXTENSION: Biofuels Venture in crisis? Check staff ratio, milestone payments, downtime

EXTENSION: Biofuels Venture in crisis? Check samples, suing, extraction technology

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