ADM invests $25M in Rennovia: the complete story

20% lower capital, 30% lower raw materials, 15% lower utilities, 30% lower manufacturing – vs petroleum.

Plus a multi-billion dollar market, a big partner in ADM, and big ambitions in adipic, glucaric and gluconic acids. 

What’s not to love about Rennovia?

In Illinois, Archer Daniels Midland Company and Rennovia, Inc. announced today that ADM has committed to a $25 million equity investment in the privately held company, which develops catalysts and processes for the cost-advantaged production of chemical products from renewable feedstocks.

The company’s first products are nylon intermediates adipic acid and hexamethylenediamine (HMD). ADM’s investment will be used for research and development programs and continuing operations.

The partners say nice things about each other

“This investment is part of ADM’s ongoing efforts to enhance returns by strengthening our portfolio of higher-margin products,” said Kevin Moore, ADM vice president, Renewable Chemicals. “There is significant and growing demand for chemical products made from renewable feedstocks. We are impressed with the technology Rennovia is developing, and look forward to the opportunity for its products to join our current portfolio of renewable chemicals—like propylene glycol and ethylene glycol—as they offer increased access to attractive end markets in nylons and other materials.”

“We are committed to continuing to identify novel technologies that provide high yields and low conversion costs,” said Todd Werpy, ADM senior vice president, Research and Development. “We believe that the new technologies being developed by Rennovia, coupled with ADM’s strength in manufacturing, will help us to deliver competitive products that complement our growing portfolio.”

“We are delighted to have the support of ADM as a strategic financial investor to scale-up and commercialize our bio-based chemical process technologies,” said Robert Wedinger, President and CEO of Rennovia. “ADM’s position as a leading producer of refined carbohydrates, combined with their focus on bio-based chemicals production, make them an ideal investor for Rennovia.”

ADM’s latest excellent adventures

ADM’s most recent activities in renewable chemicals have focused on its work with Solazyme in Clinton, Iowa. Two weeks ago, Solazyme announced that commercial operations have commenced at both Archer Daniels Midland Company’s Clinton, Iowa facility, and the downstream companion facility operated by American Natural Products in Galva, Iowa.

Solazyme, ADM and ANP have successfully manufactured three distinct and unique tailored oil products at the facilities, and products are currently being sold and distributed in both the U.S. and Brazil. Production at the ADM and ANP facilities is expected to ramp to a nameplate capacity of 20,000 MT/yr within 12-18 months, with targeted potential expansion to 100,000 MT/yr in subsequent years.

Uses? Solazyme noted, in a release, that “truckloads of product are now shipping from the Iowa operations for use in applications including lubricants, metalworking and home and personal care. These shipments are being made pursuant to multiple supply agreements as well as spot purchases, and include reorders.”

But wait, there’s more.

Last August, Archer Daniels Midland Company announced that it has joined with CIC Holdings and Chemanex PLC in a joint venture to build and operate a processing facility near Colombo, Sri Lanka, to manufacture bio-based superabsorbent polymers. These products are commonly used in food packaging, personal-care products and various industrial applications.

ADM will be the majority owner of the venture and will market the plant’s production of ADM’s BioSAP brand superabsorbents.  The BioSAP produced at the plant will be derived from starches obtained from agricultural feedstocks. Superabsorbent polymers, or SAPs, are traditionally produced from petroleum derivatives.

The world of adipic acid

As we pointed out in “The Magic Word is…Adipic“

Renewablechemicals. Say it all together, real fast. Especially in bio-based investment meetings as the universal answer to any annoyingly difficult question that cannot otherwise be answered with “Brazil”.

How do you expect to make money? Renewablechemicals. Biofuels, aren’t they a money pit? Renewablechemicals. Aren’t there big infrastructure issues? Renewablechemicals. Why should I invest in you? Renewablechemicals.

And within that world is noble adipic. Bioindustry entrepreneur, howl it it like the hungry wolf you are.

But think nylon, the wonder material. Friend of low-cost carpet, your latest pair of Jimmy Choo sneakers, or mass-market, ready-to-wear fashion sold at everyday low prices. Adipic is a major precursor.

You want green nylon? (Hint: Nike does, and Toyota) You may need renewably produced adipic acid. Who’s in the nylon hunt? Oh, just a bunch of companies like Ashai Kasei, BASF, DSM, Dupont, Honeywell, Huntsman, Koch, Lanxess, and Rhodia. Now, renewable adipic acid is being chased by companies that do not have the star brand power of, say, Dupont. But what they lack in visibility they make up in speed and nimbleness. Companies like Rennovia, Genomatica, BioAmber and Verdezyne.

Competing paths to nylon 6,6

Adipic isn’t the only way. There’s butadiene, generally thought of as a path to polybutadiene rubber (PBR) and styrene butadiene rubber (SBR), two types of synthetic rubbers used globally to replace natural rubber. But also a key intermediate chemical used by INVISTA for the production of adiponitrile (ADN), which in turn is a critical intermediate chemical used in the manufacture of nylon 6,6.

And Cobalt and Genomatica/Versalis are hot on the trail of butadiene, with LanzaTech/INVISTA, Arzeda/INVISTA and Global Bioenergies/Synthos also getting into the game

What about Rennovia, anyway?

We pointed out in “Get cracking!” that chemocatalysis is hot, hot hot this year. And Rennovia is an example — minimizing supply chain risk by employing renewable raw materials instead of petroleum to produce popular chemicals, while minimizing conversion risk by utilizing chemo-catalysis process technology in place of fermentation.

Looking at Rennovia in depth

The Mission

Rennovia’s gluconic, glucaric and adipic acids and the path to nylons, polurethanes, ployesters and more

Rennovia vs petroleum

Rennovia vs fermentation

Timeline to scale

(Back in spring 2012, the path looked like this…)

The latest from Rennovia

Last October, we reported that Rennovia produced, and shipped to a prospective partner, samples of what it believes to be the world’s first 100% bio-based nylon-6,6 polymer, under Rennovia’s RENNLON brand, made from Rennovia’s renewable monomers, RENNLON adipic acid and RENNLON hexamethylenediamine.

Production costs for Rennovia’s bio-based AA and HMD are projected to be 20-25% below that of conventional petroleum-based AA and HMD, with a significantly lower per-pound capital cost. Additional projected benefits include an 85% reduction in greenhouse gas emissions compared to conventional petroleum-derived AA, and a 50% reduction in GHG emissions compared to conventional petroleum-derived HMD.

The bottom line

$25M is not commercial-scale finance. But it’s a huge vote of confidence in Rennovia’s path as it opens up new chemicals for scale-up. We said “Get Cracking!” and ADM and Rennovia have certainly grabbed the whip.