by Martin LaMonica
Biofuel company Amyris Biotechnologies said it plans to raise $100 million through an initial public offering, one of a number of energy start-ups now seeking to tap the stock market for capital.
The Emeryville, Calif., company on Friday filed its S-1 document with the Securities and Exchange Commission, in which it laid out its plans to tap sugar cane from Brazil, now used for producing ethanol, to make different chemical products, including diesel fuel.
A source for diesel or jet fuel--Brazilian sugar cane.
(Credit: Amyris Biotechnologies) The S-1 also spelled out the many risks that the Amyris faces, including the high costs of building biorefineries and the potential backlash against using genetically modified organisms to make its products.
Amyris manipulates micro-organisms, primarily yeasts, so that they consume sugar and produce a desired product, which could be diesel, jet fuel, or other chemical products. The company founders had originally received a grant from the Bill and Melinda Gates Foundation to use its process for an antimalaria drug. Then, funded by venture capital companies including Khosla Ventures and Kleiner, Perkins, Caufield & Byers, they set out to also make liquid fuels using the same basic process.
The major advantage of making common hydrocarbons from sugar is that they can replace existing fuels and fit into the existing fuels infrastructure.
Amyris' strategy is to build biorefineries in partnership with Brazilian sugar cane processors and ethanol manufacturers. It set up a joint venture with Grupo Sao Martinho to start producing fuel next year at a facility that will cost between $80 million and $100 million, according to the prospectus. Working in Brazil gives the company access to a good source of sugar in sugar cane in a country with a highly developed ethanol industry. It also decreases the capital required to build facilities, Amyris said in its S-1.
Although Amyris has compelling technology, the S-1 document reminds potential investors of the numerous commercial hurdles that the company--like many other energy upstarts--face in bringing a product to market in fuels business. The company has test facilities but a limited operating record and is not yet cash-flow positive, having earned $64 million in revenue on expenses of nearly double that.
There are a number of green-tech IPOs planned globally this year, with the majority in wind and solar, according to a Bloomberg analysis. Among those IPO hopefuls are companies based in Silicon Valley, including Tesla Motors, solar company Solyndra, and biofuel company Codexis.
Comment
This could wind up like corn-based ethanol. When corn is udes, it drives up the prices of corn that is used for other things. This could also drive up the prices for sugar.
by Knightro2 April 19, 2010 6:48 AM PDT
Friendly typo alert. Something isn't right about this sentence: "The company founders were originally received a grant from the Bill and Melinda Gates Foundation to use its process for an anti-malaria drug." (Drop the WERE).
Like this Reply to this comment by mike_ekim April 19, 2010 6:54 AM PDT
1) It's sad that this compny is chasing the money instead of fighting malaria. But then again, I'm not fighting malaria either...
2) Sugar is very expensive.
3) The increased demand for sugar will encourage more slash-and-burn deforestation. And a field of sugar does NOT sequester as much carbon as a field of large old-growth trees.
Like this Reply to this comment by mlamonica April 19, 2010 7:13 AM PDT
To be clear, the work on the anti-malaria drug artemisinin is still going on.
http://www.amyrisbiotech.com/index.php?option=com_content&task=view&id=55&Itemid=256
http://www.artemisininproject.org/Project/index.htm
Like this by SactoGuy018 April 19, 2010 7:13 AM PDT
In the end, biofuels will come from one major source: oil-laden algae.
Unlike plant-based biomass, algae-based biomass won't interfere with food production, since oil-laden algae can grow even in seawater, which eliminates the expensive need to convert seawater to fresh water to "grow" millions of tons of algae.
Like this Reply to this comment 2 people like this comment
by solitare_pax April 19, 2010 7:41 AM PDT
You have a valid point: using crops suitable for food will only shift this from an energy crisis to a food crisis.
And considering algae-based biomass could be grown anywhere there is sun in a more controlled setting, it seems like a safer bet
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