Green Biologics to Raise $6 Million for Brazil Butanol Facility

Green Biologics Ltd., the U.K. biotechnology company, plans to raise $6 million by mid-April and will use some of the funds to develop a demonstration plant in Brazil that will convert crops into butanol.

Green Biologics has raised half that amount from existing investors, Chief Executive Officer Sean Sutcliffe said in an interview at Bloomberg’s Sao Paulo office. The company expects to complete the plant by the end of the year, he said.

Green Biologics uses microbes to convert organic material into butanol, a four-carbon molecule that can be processed into specialty chemicals or used as a transportation fuel. The Oxfordshire, U.K.-based company is seeking customers in Brazil where its technology will appeal to sugar-cane mills that want to develop new sources of revenue, he said.

Brazil offers “a large number of sugar mills and ethanol distilleries with existing assets whose profitability would be substantially enhanced using our technology,” Sutcliffe said yesterday in an e-mail. The country “should be the green chemical capital of the world.”

The demonstration plant will be able to produce 1,000 metric tons of butanol a year from crop residues, he said.

Green Biologics plans to spend $30 million to install its technology next year at an existing mill in Brazil that will turn sugar-cane juice and molasses into butanol. The chemical, which is typically made from petroleum, is worth $1,800 a ton, more than twice the price of ethanol, he said. The global annual market for butanol is about $10 billion, he said.

“We could compete on price with petroleum-based products,” he said. Brazil offers “probably the lowest production cost feedstocks in the world.”

The company may later install technology to produce butanol from bagasse, the crushed cane stalks that are typically burned to generate steam and power to run plants’ operations, he said.

The first plant to use Green Biologics technology to make butanol on a commercial scale will begin production in China in the second half of this year, he said.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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