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Solazyme, Inc. Message Board

  • greenguru58 Feb 24, 2013 12:57 AM Flag

    The Strategic Timeline: Dow + Mitsui + Solazyme (Brazil)

    1. July 19, 2011: US-based Dow Chemical and Japan’s Mitsui planned to build in Brazil what was to be the world’s largest fully integrated biopolymer operation, using sugar cane ethanol to produce bioplastics for packaging. The investment were to bepart of a push by global oil and petrochemicals majors into Brazil’s sugar cane ethanol industry in a bid to tap the country’s growing potential as an exporter of renewable fuels and bioplastics.

    “What will be unique here is the fact that this will be fully integrated,” said Luis Cirihal, business director for green alternatives and new business development for Latin America at Dow Chemicals.

    The interest from Dow and Mitsui in biopolymers came as lawmakers in Washington were preparing to scrap ethanol subsidies and tariffs – a move that would have opened the US to cheaper imports from Brazil, the world’s only other leading producer of the biofuel.

    Dow and Mitsui, under their new venture, are seeking to extend the interest in sugar cane ethanol to bioplastics made from the fuel. Under the deal, Mitsui would become a 50 per cent partner in a joint venture that would control Dow’s existing sugar growing operation. Dow controls 17,000 hectares of sugar cane in Santa Vitória, Minas Gerais state, and plans to more than double this once the new joint venture is fully operational.

    Under the first phase, the initial sugar cane ethanol plant will be operational by 2013 to be accompanied by the polymer plant and further ethanol milling capacity. If completed, the facility would have been the world’s largest integrated production operation for the production of biopolymers made from renewable, sugarcane derived ethanol.

    Biopolymers produced at the facility would have been used in industries such as healthcare and would be priced at competitive levels compared with products made from fossil fuels.

    2. May 2, 2012 – Pay attention to the JDA2 agreement. Solazyme and The Dow Chemical Company, announced today that they have entered into a contingent offtake agreement in which Dow has agreed to purchase from Solazyme all of its requirements of non-vegetable microbe-based oils for use in dielectric fluid applications through 2015. Concurrently, Solazyme and Dow have entered into a Phase 2 Joint Development Agreement (JDA2), an exclusive, multi-year extension of the current joint-development agreement including accelerated commercialization timelines based on Solazyme’s rapid progress in the production of tailored algal oils. JDA2 enables additional application development work to be conducted by Dow, due to Solazyme’s accelerated ability to scale up their uniquely tailored algal oil feedstocks. Consumption of Solazyme’s algal oil feedstocks is expected to significantly exceed the minimum estimated volumes of 8.5 million gallons (29,000 metric tons) starting in the second half of 2013 and through 2015.

    3. January 09, 2013: Dow Chemical Co. and Japanese trading company Mitsui & Co. Ltd recently announced postponement of plans to build a biopolymer plant sourcing sugarcane ethanol. This is due to rising design and construction costs and land ownership laws in Brazil for the indefinite delay.

    The bioplastics project, first announced in 2007, had been slated to break ground this year on a biopolymers facility in Santa Vitoria, Minas Gerais state, at a projected cost of US$1.5 billion. Dow formed a joint venture with Mitsui in July 2011, with plans to plant and harvest their own sugarcane, build an ethanol plant with 2.7 million metric tons of cane capacity, and follow it with an ethanol-to-ethylene and biopolymers plant. The entire complex was originally planned to begin operating later this year.

    4. February 6, 2013 – Solazyme and Mitsui & Co., Ltd. Announced that they have entered into an agreement to jointly develop a suite of triglyceride oils for use primarily in the oleochemical industry. Product development is expected to span a multi-year period, with periodic product introductions throughout the term of the joint development alliance. End use applications may include renewable, high-performance polymer additives for plastic applications, aviation lubricants, and toiletry and household products.

    “Mitsui’s extensive knowledge of the end use markets for the jointly-developed triglyceride products, including both the oleochemical industry and applications further downstream, makes Mitsui an ideal fit for Solazyme,” said Jonathan Wolfson, CEO, Solazyme. “We look forward to rapid progress on our research and development efforts, and to commercialize these novel products thereafter.”

    “Collaborating with Solazyme allows us to develop highly attractive products to penetrate the traditional oleochemicals industry, and expand beyond the supply limitations caused by both regional oil production and constraints in conventional oil profiles. Solazyme’s flexible manufacturing process and oil tailoring capabilities helps to support long-term competitiveness, independent of price swings inherent to this industry, while allowing us to produce tailored oils that are in demand in the marketplace,” said Mr. Daiji Kojima, General Manager of Specialty chemicals Division, Mitsui. “Mitsui looks forward to strengthening its position in the oleochemicals industry through the successful development and commercialization of these novel products as a potential source of new sustainable materials to oleochemical companies including Mitsui’s subsidiary, Palm-Oleo Sdn.Bhd.”

    5. Thursday February 14 2013: The Dow Chemical Company of the United States and Japan-based Mitsui & Co. are looking for new areas to expand sugarcane plantings in the Triângulo Mineiro region in the state of Minas Gerais.

    The announcement comes after the partners postponed the second phase of their joint venture to build a production unit to manufacture renewable polyethylene (Bio-PE) for packaging from sugarcane ethanol.

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    • greenguru58 May 14, 2013 1:33 PM Flag

      Interesting developments in Brazil that should be considered in light of the Dow + Mitsui Solazyme Strategic Timeline.

      * Brazil is starting to feel the pinch from the US in how they compete in energy and chemicals because of shale which is a cheaper source for the generation of electricity and raw materials for petrochemical products.
      * The example cited is how Dow Chemical and Mitsui decided to postpone construction in Minas Gerais, a green polyethylene plant. Another complex that follows with indefinite timeline unit is Braskem's green polypropylene (Rio Grande do Sul is one of the candidates to receive this investment). The structure must have a minimum production capacity of 30,000 tons per year and must absorb around £ 170 million. In 2010, Braskem inaugurated its first plant in Triunfo. The unit received an investment of $ 500 million and has an annual production capacity of 200,000 tons of ethylene, which are converted into 200,000 tons of polyethylene, for the production of bags and other packaging items,
      * This in general makes "green" products (energy and chemical and oil products) more expensive when compared to the those produced using cheaper shale.

      The environment requires the Brazilian Government to support the industries that can compete against shale bye providing financing and resources for their sustainable growth. The Solazyme Bunge project is a perfect example of this.

      Connect the dots.

    • greenguru58 Mar 10, 2013 11:42 AM Flag

      No need to wonder what Misui & Dow will do with their $1.B biopolymers facility in Santa Vitoria, Minas Gerais.

      No need to wonder how they will be using their 2.7 million metric tons of cane capacity (Dow controls 17,000 hectares of sugar cane in Santa Vitória, and plans were to more than double this once their new joint venture was fully operational.).

      And no need to wonder how Solazyme will fit into this threesome.

      Do any of you realize how absolutely huge this is?

    • This deserves a bump up. Nice timeline, gg

      • 2 Replies to kqforever
      • greenguru58 Jun 26, 2013 9:09 PM Flag

        In my opinion, the capacity we're looking for and that which will contribute to Solazyme's achieving $1 billion in commercial revenue by 2015 will come from Dow + Mitsui + Solazyme (Brazil).

        The important Job Description on the Solazyme website to pay attention to: Technical Sales Representative - Plastics

        he Technical Sales Representative is responsible for developing relationships with targeted customers in the plastics industry through the introduction and selling of the Company’s novel, unique products. This requires interaction with both R&D (to gain product approval) and procurement (to close the deal) personnel.

        B.S. in a technical field, preferably Chemistry, Chemical or Polymer Engineering.
        7-10 years of relevant and applicable sales experience in the plastics industry.
        Strong sales skills. Must have track record of selling novel value propositions, and strong negotiation and closing techniques.
        Strong technical and analytical skills. Ability to analyze technical data, identify value propositions in complex applications, and synthesize and quantify it such that the customer can easily understand it. Strong presentation skills. Ability to develop and deliver a pitch and influence key decision makers.
        Outstanding communication and interpersonal skills.
        Ability to effectively operate in a complex technical / commercial environment with limited supervision. Self-motivated.
        Strong organizational, and time management skills.
        Greater than 60% travel required to visit customers throughout the continental US and abroad.
        Fluent in Microsoft office products, including Excel, Word and Powerpoint.

      • greenguru58 Feb 25, 2013 8:59 AM Flag

        Thanks KQ. You and PCP may also find this of interest.

        Feb-12 2013
        Brazil's BNDES opened up its annual 4 billion reais ($2 billion) in financing for the cane sector to foreign groups, which now make up more than 40% of crushing.
        - George Soros' Adecoagro was one of the first foreign capital firms to tap the credit line for 488.6 million reais ($245 million) when it announced in January it would build a new greenfield mill in Mato Grosso do Sul.
        - Dow Chemical and Mitsui are also moving ahead with their cane mill - the only other greenfield project in the works. New greenfield projects are still very rare. Most investments are in expansion, or so-called brownfields.

    • Thanks for putting that together.

      The very favorable terms of the BNDES financing for Moema tell me that BNDES is sold on the SZYM platform and that they want to encourage more projects utilizing the SZYM platform inBrazil.

      The dots between Mitsui, DOW and SZYM are indeed getting connected. DOW and Mitsui cancel a project but continue to look to add to existing sugar cane acreage? Tells me that the mother of all plants may be coming down the pipe.

      During cc Wolfson said that the SZYM bioplatform is very powerful. He said it in a manner that has stuck in my head. ADM kicked Metabolix out of Clinton facility to make room for SZYM and now it appears mitsui and Dow are doing a 180 to accommodate SZYM technology.

      WOW. Just wow

      • 1 Reply to politicalcapitalspent
      • greenguru58 Jun 3, 2013 12:54 PM Flag

        Today's news: Brazil plans to triple funds for companies including Bunge Ltd. (BG)
        This news alone should have sent shares of Solazyme up 4%, not down!

        Brazil will pour 6.1 billion reais ($2.85 billion) to fund renewable-power and biofuel technology research, accelerating its efforts to modernize its energy industry and shift away from a commodity-export based economy.

        The country plans to triple funds for companies including Bunge Ltd. (BG) and Petroleo Brasileiro SA that are developing processes to turn sugar cane into high-margin chemicals and boost ethanol output, said Alexandre Tanaka, an official with Brazil’s research-financing agency Finep.

        Brazil’s ambition is to lead development of the next generation of biofuels after a decade of hyperinflation stymied research budgets. The country is seeking to become a supplier of fuel-production technology and processes rather than purchasing them from other countries, Tanaka said. Its position as the world’s top producer of sugar cane may help it succeed with an approach some U.S. companies have abandoned.

        “Brazil has traditionally had a policy of substituting imported technology and prioritizing commodities in its trade balance,” Tanaka said by phone from Brasilia. When the country’s economic policies were shaped by hyperinflation “it was unthinkable to invest in projects that yield returns over long periods. Technology innovation is a long-term investment.”

        Tanaka’s comments are the most detailed to date on the progress of investment programs under President Dilma Rousseff.

        Low Interest
        Financiadora de Estudos e Projetos, as the innovation agency is officially known, and the state-development bank BNDES will provide 5.2 billion reais of loans under its PAISS program and another government effort announced in April called Inova Energia, Tanaka said. The debt will carry interest rates as low as 3.5 percent, less than half the benchmark interest rate. Finep will also offer 300 million reais of grants.

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