The company plans to open a plant in 2014 at an ADM facility in Iowa. It will also triple the planned output from an existing venture with Bunge, according to a statement today from South San Francisco, California-based Solazyme.
The ADM plant will produce 20,000 metric tons of oil in 2014, and may eventually expand to 100,000 tons a year. Bunge and Solazyme are building a plant in Brazil that will be able to make 100,000 tons a year starting in the fourth quarter of 2013, and Bunge will use the same technology to generate a total of as much as 300,000 tons a year at multiple facilities by 2016.
“We continue to execute on our commercialization strategy, highlighted by on-target progress with our capacity build-outs, the execution of a JV expansion framework agreement with Bunge, and our new strategic relationship with ADM,” Solazyme Chief Executive Officer Jonathan Wolfson said in the statement.
Solazyme reported a third-quarter loss of 22.5 million, or 37 cents a share, compared with a loss of $14.1 million, or 24 cents, a year earlier. Analysts were expecting a loss of 39 cents, the average of seven estimates compiled by Bloomberg.
The production agreements are too far out to make a significant difference in the near term, Mike Ritzenthaler, an analyst with Piper Jaffray Cos. in Minneapolis, said in an e- mail today.
“The only thing that matters is selling product, and they have no offtake agreements,” he said. ‘Having capacity built before there is demand for the product only serves to squeeze the margins as it gives their customers the upper hand in contract negotiations. If anything, these additional upstream agreements put them in an even more precarious situation.’’
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