Ceres: Biofuels Digest’s 2014 5-Minute Guide

March 12, 2014 |

Ceres develops & markets low-carbon, non-food grasses for advanced biofuels and biopower. Our energy crops can provide more fuel or electricity, new opportunities for growers and a cleaner environment for us all.

Using advanced plant breeding and biotechnology, Ceres is developing dedicated energy crops as raw materials for renewable transportation fuels, electricity and bio-based products.

The company aims at increasing yields, lowering costs, facilitating processing and refining, and even helping reduce greenhouse gases.

Many of the same traits that benefit energy crops also benefit traditional row crops. So, Ceres supplies traits and technology to other well-known crop developers of corn, soy and other non-energy crops.

The company utilizes genomics and model systems, compositional analysis, and marker-assisted plant breeding — as well as specialized, high-throughput systems to accelerate the company’s product development process.

Rankings

50 Hottest Companies in Bioenergy: #20, 2013/14

 

30 Hottest Companies in Renewable Chemicals: #29, 2013/14

 

Biofuels Digest Awards

 

2012 New Feedstock (Trial) Award: Ceres, sweet sorghum

 

The Situation

It all comes down to Brazil. Plantings last year had good, but not breakthrough numbers that would have led to large-scale commercial plantings. So, Ceres in going through a season of trialing with its sweet sorghum — aiming to establish the crop as an interseasonal sugar producer for Brazil’s sugarcane growers

To that end, recently, Ceres and Syngenta announced that they have extended a joint market development agreement in Brazil. The companies will move forward with their efforts to promote the use of both sweet sorghum and high biomass sorghum at Brazilian ethanol mills. Under the renewed agreement, Syngenta and Ceres will continue to collaborate on field evaluations with mills. Syngenta will evaluate its portfolio of crop protection products alongside Ceres hybrids, while Ceres will provide both seed and research support. Both companies will coordinate outreach to ethanol mills and develop industry training programs.

Earlier this month, Ceres announced the pricing of an underwritten public offering of 20,000,000 shares of common stock at a public offering price of $1.00 per share. Ceres also granted the underwriters a 45-day option to purchase up to 3,000,000 additional shares of common stock to cover over-allotments, if any. Ceres expects to receive approximately $20 million in gross proceeds, before deducting underwriting discounts and commissions and offering expenses payable by the company. Ceres intends to use the net proceeds from this offering for general corporate purposes, including working capital.

Back in January, Ceres announced a net loss for its Q1 of the 2014 FY (the company is on a September fiscal) of $8.2 million on revenues of $0.8 million. Product sales remained relatively unchanged compared to the first quarter of 2012.

The company reported at the time that mill plantings for the 2013-2014 sorghum growing season in Brazil have been successfully completed with 49 customers, including mills and mill suppliers, across 55 different locations. These plantings consist primarily of smaller, multi-hybrid evaluations designed to determine yield potential and identify the best performing hybrids for specific regions. Growing conditions have been generally favorable to date across most regions, the company said.

Total plantings of the company’s commercial and pre-commercial sorghum hybrids cover approximately 1,000 hectares this season. Harvests are expected to commence in late February to early March and continue through May.

Also, during Q1, the company landed a U.S. patent related to a sorghum-derived gene promoter useful for regulating the expression of genes developed through biotechnology in various crops.

Type of technology:
Plant biotechnology, gene marker-assisted breeding and other genomics

Fuel Type:
Biomass is the common denominator to advanced biofuels, biopower and bioproducts and is independent of the end-fuel molecule.

Major investors:
Ceres is a public company. Its common stock trades on the Nasdaq Global Market under the ticker symbol CERE. Pre-IPO investors include Warburg Pincus, Soros Private Equity Partners, GIMV and Oppenheimer.

Past milestones:
Completed IPO in February 2012.

Demonstrated at commercial-scale that sweet sorghum could be used as a season-extending feedstock for Brazil’s 400+ ethanol mills.

The company’s 2nd-generation of sweet sorghum hybrids significantly outperformed its initial products during the 2011-2012 growing season in Brazil.

The Brazilian government’s agricultural research corporation, Embrapa, selected Ceres to evaluate its leading sweet sorghum variety for use in ethanol production.

The company’s high-biomass and stress tolerance traits have demonstrated biomass yield increases of ~50% under non-irrigated conditions.

Ceres and a research collaborator in the U.K. completed the first high-resolution genetic map of miscanthus. This milestone is expected to speed development of economically viable seeded miscanthus varieties.

Established world’s largest energy grass trialing network

Future milestones:
Ongoing commercial sales and scale-up in pace with bioenergy industry in Brazil, Europe and the United States.

Ceres Traits to Watch
Enhanced conversion: Substantial reductions in the cellulase enzyme cocktails required to release fermentable sugars from plant biomass.  This trait could be a key enabler of the large-scale use of biochemical processes and fermentation

High-biomass, low-input traits:  High yields and greater yield stability on low-rent, marginal land. Feedstock is 50-70% of operating costs, and land rents can be a significant cost component. These traits could provide a major lever against cost and enable larger volumes/facilities.

Business model:
Seed sales and trait licenses

Competitive edge:
Genetics, intellectual property, early-mover advantage

Distribution, research, marketing or production partnerships or alliances.
R&D: Texas A&M (leading sorghum genetics), Samuel Noble Foundation (Switchgrass genetics) and the Institute of Biological, Environmental and Rural Sciences Institute of Aberystwyth University in the U.K. (Miscanthus genetics).

Development stage: Commercial

Company website

Category: 5-Minute Guide

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