Aug. 1 (Bloomberg) -- Cobalt Technologies Inc., a closely held U.S. biotechnology company, will build a plant in Brazil with a unit of Solvay SA to convert sugar-cane waste into butanol.
The demonstration facility is expected to show that Cobalt’s biobutanol fermentation technology may be installed at existing cane mills as the company pursues sales to commercial processing facilities in Brazil, the Mountain View, California-based company said in a statement today. It will jointly develop and operate the plant with Rhodia SA, the specialty chemicals maker that Solvay acquired last year.
The deal expands a partnership the companies announced in October, when Cobalt said it may build multiple biorefineries with Rhodia in Latin America after testing the company’s technology in Brazil, Steven Shevick, chief financial officer of Cobalt, said by e-mail. The demonstration plant won’t cost more than $15 million, he said.
The company makes n-butanol, a four-carbon alcohol that’s used in paints, adhesives, inks and other solvents and is a $5 billion a year market. N-butanol is traditionally made from propylene, a petroleum product, and may be converted into other chemicals that are used to manufacture products such as tires, plastics and jet fuel, according to Cobalt.
The plant is expected to be completed by the third quarter of 2013. Cobalt may begin working on a commercial-scale biorefinery in 2014 with production beginning during the sugar cane harvest of 2015.
Cobalt and Rhodia are installing the demonstration plant at a mill owned by a “a top five sugar producer” that Shevick wouldn’t name. The production system will be about 10 percent the size of one for a commercial facility, he said.
Cobalt said it can produce n-butanol through fermentation about 40 percent to 60 percent cheaper than traditional processes based on petroleum.
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