Avantium raises $50M from Coca-Cola, Danone, Swire and more: renewable PEF plastic bottles take the spotlight
Thought that the competition for the 100% all-renewable plastic bottle was a race for commercial paraxylene at scale?
Well, hold on a darn minute. Avantium and its PEF molecule aims to steal the inside track to replacing all that fossil-based polyester.
In the Netherlands, Avantium (ranked #15 in the Digest’s 30 Hottest Companies in Biobased Chemicals) announced that it has closed a financing round of $50 million from a consortium of iconic strategic players. This unique consortium consists of Swire Pacific, The Coca-Cola Company, DANONE, ALPLA, and existing shareholders. Follow on investments were made by existing shareholders Sofinnova Partners, Capricorn Venture Partners, ING Corporate Investments, Aescap Venture, Navitas Capital, Aster Capital and De Hoge Dennen Capital.
Use of proceeds
With this capital raise the new investors affirm their commitment to advancing PEF, Avantium’s next generation packaging material. Proceeds will be used to complete the industrial validation of PEF and finalize the engineering & design of the first commercial scale plant. As part of its strategy to use responsibly sourced plant based materials for PEF production, Avantium will validate the use of 2nd generation feedstock.
What is PEF?
PEF is a novel molecule that can replace petroleum based polyesters such as PET. According to Avantium, PEF has numerous superior properties when compared with PET, including lower permeability of oxygen, carbon-dioxide and water and an enhanced ability to withstand heat. The company contends that it can replace PET in plastic bottling, carpets, apparel, carpets, home furnishing, disposables, fabrics, diapers, filters, flexible packing, trays or cups, and industrial fibers.
What is YXY?
According to Avantium: “When you start looking which green building blocks have the potential to replace oil based chemicals, you will always see furanics. Furanics are chemicals that are formed when you take carbohydrates and remove the water. They can be applied for such a wide range of products that researchers, companies and politicians have recognized its huge potential. But up to now no one was able to produce them in a low-cost way.
The YXY technology is a 2-step chemical, catalytic process to convert sugars to Furan-dicarboxylic acid (FDCA), a biobased alternative to terephthalic acid (TA). Avantium focuses its efforts on using FDCA to produce the polyester, Polyethylene-furanoate (PEF), a 100% biobased material that could replace Polyethylene-terephthalate (PET) in large markets such as bottles, fiber and film.
The pilot plant
in 2011, Avantium announced that it had started with the construction of a pilot plant at the Chemelot site (Geleen, the Netherlands). The plant opened in 2012, at a time when Avantium was collaborating with industrial partners such as NatureWorks (a subsidiary of Cargill) and Teijin Aramid to develop novel materials on basis of its YXY building blocks. The pilot plant was partly funded by a EUR 1 million grant from the Dutch Ministry of Agriculture.
The 2011 financing
In 2011, Avantium completed a $36M million financing round with new investors Sofinnova Partners, Aster Capital and De Hoge Dennen as well as existing investors Aescap Venture, Capricorn Cleantech Fund, ING Corporate Investments and Navitas Capital. Part of the funding was used to buy out shares held by DFJ Esprit, AlpInvest, Eastman, EDBI and Pfizer, aligning the company’s shareholder base with its strategy.
Partnerships in polyamides
In mid-2011, Solvay and Avantium announced a partnership to jointly develop a next generation of green high-performance polyamides for engineering plastics. The partnership combines Solvay’s leading position in specialty polymers and Avantium’s YXY technology for producing building blocks for green materials. Ultimately the company also signed a partnership with Rhodia with the same goals.
Partnerships in PEF bottles
In 2012, Avantium announced Joint Development Agreements for the development of PEF bottles with Danone Research and Coca Cola. Based on the YXY technology, the Avantium and Danone Research joint objective is to contribute to the emergence of a new renewable material generation which will not be in direct competition with food.
A year ago this week, Avantium and ALPLA Werke Alwin Lehner, a leading plastic converter, announced their joint development agreement for the development of PEF bottles. ALPLA is the third company to collaborate with Avantium on PEF, a bioplastic based on Avantium’s proprietary YXY technology. ALPLA will develop PEF bottles for personal care/ home care applications, such as cosmetics and detergents and for food applications such as sauces, dressings, baby foods and edible oils. The company also ultimately signed a JDA with TCCC for development of PEF bottles.
Reaction from the partners
Tom van Aken, Avantium CEO stated: “Closing this financing round with Swire, The Coca-Cola Company, Danone, ALPLA and our existing investors underpins their commitment to making PEF bottles a commercial success. PEF is a 100% biobased plastic with superior performance compared to today’s packaging materials and represents a tremendous market opportunity. Our proprietary YXY technology to make PEF has been proven at pilot plant scale as we are now moving to commercial deployment. “
Philippe Lacamp, Swire Pacific’s Head of Sustainable Development said, “We are excited to invest in Avantium, which has an impressive track record in developing breakthrough technology. This investment aligns with our sustainable development strategy to build and develop a portfolio of promising early stage sustainable technologies to reach commercial scale. The technology that Avantium supplies represents a pathway to the next generation of bio-based packaging materials, and has huge potential application for our existing bottling businesses.”
Yu Shi, Director Next Generation Materials and Sustainability Research at The Coca-Cola Company comments, “By advancing smart technology, we believe performance and sustainability can go hand-in-hand to make a world of difference for consumers, the environment and our business. Avantium’s breakthrough technology continues to offer a promising pathway for supporting both our efforts to commercialize renewable, plant-based plastics and develop unique properties for packaging to drive new growth. We are pleased to further expand our existing partnership with Avantium through this latest investment.”
Frederic Jouin, Director of Danone Research Packaging Center comments: “We participate in this venture as we believe in the future of bio-based plastics for our packaging, with a potential significant reduction in carbon footprint and enhanced barrier properties compared to PET. With this investment, we re-affirm our will to launch a 100% bio-based bottle not in direct competition with food and 100% recyclable and our wish to accelerate this launch on the market.”
Jan van der Eijk, Chairman of the Avantium Supervisory Board, adds; “It is a remarkable milestone in the biobased chemicals industry that large brand owners, such as The Coca-Cola Company and DANONE jointly invest for the first time in a company like Avantium. Together with the investment of Swire and ALPLA, it is clear to us that the market is willing to back winning technologies, such as PEF”.
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