On Commercializing Biofuels & Biochemicals

Leo Zhang

Sime Darby

Over the past few years, the Biofuels & Biochemicals sector has experienced a prominent shift from a pure biofuels focus to a biochemicals-based commercialization strategy. We recognize such a shift as a necessary strategy repositioning based on a multitude of factors. For instance, as companies continue to optimize their scale-up efforts, biochemicals and bio-based materials may still incur a pricing premium over commodity-based fuel products. In addition, we have also observed increasing corporate interests in the biochemicals space as they are looking to incorporate more renewables into their product portfolios. Therefore, we are seeing active investments and partnerships by larger corporates into the biochemicals subsector.

Verdezyne

Verdezyne is a prime example of this shift from fuels to chemicals. Having built a biotechnology platform, Verdezyne was initially set out to target the advanced biofuels market, but has since realigned its focus towards chemicals by selling its fuel-based intellectual property to DuPont, and instead focusing on renewable petrochemical replacements. Recently, the company has announced a $48 million investment round, led by Malaysian multination conglomerate, Sime Darby Berhad. Along with existing corporate investors from BP Ventures and DSM Venturing, the new funding will accelerate Verdezyne’s technology development.

In fact, many pure play biochemical companies are currently in the forefront of commercializing their technologies with corporate partners. One prime example to highlight is Genomatica, a California-based developer of a fermentation technology platform  for biochemicals, has successfully achieved commercial production with BASF and Versalis. Consumer product companies are also extremely active in investing and partnering with leading biochemical companies. Coca-Cola has established partnerships with several biochemical companies, such as Avantium, Virent and Gevo, to develop plant-based plastic bottles.