Clariant Says in Advanced Talks to Ramp Up Biofuels Business

Clariant AG is in advanced talks with potential partners that can build a bioethanol factory to generate additional revenue from enzyme technology acquired through the $2.5 billion purchase of Sued-Chemie.

The Swiss company wants a partner to build a second-generation biofuel plant capable of generating as much as 150,000 tons based on its Sunliquid enzyme technology, Markus Rarbach, head of Clariant’s Biofuels & Derivatives business, said in a telephone interview today.

The maker of cosmetic ingredients and plastics-additives is seeking an entry into a market dominated by Denmark’s Novozymes A/S, DuPont Co. and Royal DSM NV. Clariant is looking to outperform yields generated by the incumbent enzymes to enable it to get a commercial-scale plant up and running without the investment in a plant that Novozymes and DSM made.

“We are in close and advanced discussions with partners about commercialization of the technology,” said Rarbach, adding that he is confident of securing a tie-up based on the level of interest and quality of talks under way.

Potential partners range from agricultural companies to petrol distributors and bioethanol makers, the manager said, declining to be more specific.

Clariant is betting U.S. demand for greater domestic fuel production, and a push towards environmentally friendly petrol-alternatives in Europe, will open a market for its startup biofuels operation. The Muttenz-based company is taking steps towards commercializing Sunliquid, which has been in development since 2006, after opening a 28 million-euro ($36 million) pilot factory in Straubing last year, Rarbach said.

Yield Claim

Clariant’s production method has a higher yield and better economics than competing technologies, Rarbach said. DSM and Poet LLC, one of the world’s largest ethanol producers, are partnering on a U.S.-based project to make fuel from agricultural residue and Brazil’s government has approved loans to companies including Dow Chemical Co. and Petrobras for research into similar projects.

Sunliquid converts the stalks and leaves left over from crop harvests into ethanol. Some 240 million tons of cereal straw waste accumulates across the European Union each year, with the potential to meet 25 percent of the region´s 2020 demand for gasoline, Clariant estimates.

Rarbach, who started working on Sunliquid at Sued-Chemie in 2006 and continued researching after Clariant acquired the German catalyst maker in 2011, said the company is hiring for the project, which currently employs 70 to 80 staff.

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