Brazil’s GranBio Acquires USA’s American Process

Acquisitions are often big news but the latest announcement of Brazil-based GranBio’s acquisition of Georgia-based American Process Inc. is particularly fascinating. The acquisition of American Process Inc’s technologies, intellectual property portfolio and physical assets strengthens GranBio’s market position in the deployment of highly competitive industrial processes for conversion of biomass to renewable fuels, chemicals, and nanocellulose.

The details

GranBio completed the acquisition of 100% equity in American Process Inc. and affiliate companies including AVAPCO LLC and API Intellectual Properties Holdings. The acquired assets include the Alpena Biorefinery in Alpena Michigan, the Thomaston Biorefinery and R&D center in Thomaston, Georgia, operations, research, and business development staff and an extensive intellectual property portfolio in the biorefinery, biofuels, biochemicals, and nanocellulose fields with over 200 granted and pending patents.

“Acquiring the GreenPower+, GreenBox+, and AVAP biorefinery technologies and the BioPlus Nanocellulose Technology and their associated world-class demonstration plants and exceptional operations and R&D staff is part of GranBio’s mission to become a global leader in the bioeconomy. As evidenced by the construction and operation of the first commercial scale cellulosic ethanol plant in Brazil, GranBio is deeply committed to launching innovative biotechnologies that build a better and more environmentally safe planet for the next generations,” said GranBio’s president, Bernardo Gradin.

To read about American Process and see why GranBio would be interested in acquiring them, check out “The Digest’s 2018 Multi-Slide Guide to Nanocellulose, American Process style” – American Process VP Kim Nelson gave this illuminating overview at ABLC Global 2018 in San Francisco.

The backstory

GranBio was created in 2011 and describes itself as “an industrial biotechnology company focused on commercial deployment of technologies for the production of biofuels, biochemicals, and advanced renewable materials including nanocellulose. GranBio’s mission is to make economically feasible the deployment on large scale of cellulose carbon for the production of biofuels, biochemicals, and advanced renewable materials as one of the alternatives to the intensive use of fossil carbon.”

Back in 2015, GranBio obtained commercial approval from the Comissão Técnica Nacional de Biossegurança (CTNBio) for its first proprietary yeast that is utilized to produce cellulosic ethanol. Called Celere-2L, the yeast is utilized in producing cellulosic (2G) ethanol, and is capable of converting, in a single fermenting process, the C5 and C6 sugars present in sugar cane straw and bagasse into ethanol.

Celere-2L was developed based on one of the principal lines of yeast utilized in the traditional (1G) process for making biofuel, and totally adapted to Brazil’s climate.

Setting some firsts

GranBio operates the first commercial scale cellulosic ethanol plant in the Southern Hemisphere. The biorefinery, named Bioflex 1, is located in Alagoas, Brazil and converts biomass from sugarcane residue, straw and bagasse into “second-generation” cellulosic ethanol and lignin.

BioFlex 1 is proof of concept of biomass potential on a commercial scale. In addition to BioFlex 1, GranBio holds two semi-commercial scale biorefineries in the United States that demonstrate GranBio technology for biochemicals and nanocellulose with more than 200 patents registered in the area of renewable materials.

GranBio just recently resumed commercial operations at its 82 million-liters Bioflex 1 cellulosic ethanol plant, as reported in The Digest in January. The plant is expected to produce about 30 million liters of ethanol this year and 50 million liters in 2020.

The plant, located in the northeastern state of Alagoas, extracts bagasse and sugarcane straw to produce cellulosic ethanol. The plant is the first of its kind built in the southern hemisphere, according to O Petroleo. Bioflex 1 came on stream in September 2014 but operations were halted in 2016 after complications in the pretreatment of its sugarcane load forced the shutdown.

Energy cane

GranBio has been putting a lot of effort into energy cane – sugarcane that is genetically modified to become more productive for biofuel and biochemicals manufacturing, as well as for renewable energy generation. The first commercial plantation of their new energy cane variety took place in 2015.

The result is a more robust cane with a higher fiber content and productive potential, and longer cultivars cutting life, which is ideal for the production of second-generation biofuels and biochemicals and the generation and/ or cogeneration of electric power.

One of its greatest advantages is that it can be planted in areas with low agricultural capacity, which allows the exploitation of less favored regions, increase productivity per hectare, in addition to not competing with food production. The energy cane has a deeper root system for feeding with water and nutrients which means it requires less water and less inputs to grow. The potential is enormous: Brazil has 32 million hectares of degraded pastures that can be occupied with energy cane; more than the entire farmland of Europe.

GranBio chose Alagoas to develop CanaVertix because the region has an ideal microclimate for hybridization and variety selection. Currently, GranBio has nine varieties of energy cane registered with the National Service for the Protection of Cultivars (SNPC) and eight long-term CanaVertix licensing agreements with relevant players from the Brazilian sugar and alcohol industry.

American Process

As for American Process, they had a busy year back in 2017 with a collaboration on a Malaysia palm oil biomaterials project with MYBiomass, as reported in Nuu in January 2017. The nanocellulose production project was using oil palm empty fruit-bunches and converting them into cellulose additives for use in automotive parts, paper and textiles. API was focused on the technical and material development aspects while MYBiomass was using its oil palm biomass supply and market strength to help bring the project to fruition.

As reported in Nuu in March 2017, American Process also signed a joint development agreement with India’s Aditya Birla Carbon Group to explore the synergistic use of nanocellulose and carbon black to reduce rolling resistance in tires. Carbon black makes up about a quarter of tires by weight and 70% of global carbon black production is earmarked for tire production. Nanocellulose, a renewable material with strength comparable to carbon fiber, has “unique synergistic effects” with filler materials like carbon black in improving the performance of composites.

Bottom Line

GranBio launched a research center back in 2013 which focuses on genetic improvement of microorganisms, biomass processing, and developing processes for fermentation and enzymatic hydrolysis. The team has more than 20 scientists, including 11 with PhDs. With that kind of focus on improvements and innovation, we see more coming from GranBio in the future and not just in the way of acquisitions but new technologies like its work with energy cane or more proprietary yeasts.

In the meantime, this acquisition will definitely provide a big boost to GranBio’s growth given what American Process already has developed and their past successes especially in regards to nanocellulose and their proprietary technologies for producing low cost cellulosic sugars from non-food based biomass.