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Gevo to produce isobutanol and ethanol simultaneously

By Erin Voegele | March 26, 2014

Gevo Inc. has released 2013 financial results, reporting total revenues of $17.91 million for the year, down from $32.41 million in 2012. The company reported a gross loss of $9.69 million, compared to $8.03 million the previous year. Gevo also announced it is transitioning it Luverne, Minn., plant to the production of both isobutanol and ethanol.

In press release announcing the results, Gevo attributed the decision to produce both fuels to the steady progress made in executing the company’s flexible production technology strategy and the high ethanol margin environment. According to Gevo, producing both ethanol and isobutanol allows the company to fully utilize the Luverne plant and increase cash flow as it continues to commercialize its isobutanol capabilities.

During a call to discuss the results, Gevo CEO Pat Gruber elaborated, noting the company has made a great deal of progress moving through the isobutanol commercial process learning curve. “Fundamentally, our technology works at scale with corn mash—the feedstock—and we are in the midst of learning how to run the integrated full-scale isobutanol process,” he said. “As we have advanced on the curve, we have discovered that the isobutanol technology not only works, but can work concurrently with producing ethanol.”

While Gevo’s original vision was to focus on one product, Gruber said the company is now confident it can leverage the flexibility of its technology to more fully utilize all the operating units of the plant to produce both ethanol and isobutanol simultaneously. “Needless to say, the additional cash flow is a benefit…as we scale up the technology,” he said. According to Gruber, three of the plant’s four fermenters will produce ethanol, while the remaining fermenter will produce isobutanol.

In addition to increasing the available cash flow as Gevo optimizes its isobutanol production technology, producing ethanol and isobutanol concurrently is expected to improve the operational environment of the plant for the optimization of isobutanol production by creating a continuous, stable mash flow and consistent recycle of water back to the fermenters. According to information released by the company, it also broadens the potential market to license, as partners increasingly see the benefit of coproducing both fuels at as single site.

With regard to the isobutanol production process, Gruber noted Gevo has made a lot of process on learning how to run the process at scale. He said the company has commissioned its proprietary system to sterilize corn mash, and has proved that its isobutanol-producing yeast and GIFT system work at commercial scale with corn mash. To date, the company has also achieved up to 71 percent of its targeted gallons per batch goal and produce isobutanol that met quality standards. Gruber also said that the company has demonstrated that it can manage infections during fermentation, achieving more than 100 percent of its goal, although not with the consistency or reliability that is needed. All of the facility’s fermenters and GIFT systems have operated and performed as expected. In addition, the plant has begun the integration of the water recycle streams and has achieved greater than 90 percent water recycle in fermentation.

Recent achievements highlighted in the financial release include the March 6 announcement that a letter of intent has been signed with Porta Hnos S.A. under which the Argentina-based ethanol producer would become the exclusive licensee of GIFT in that country to produce isobutanol. During the fourth quarter of last year, Gevo began selling biobased isooctane made from its isobutanol for specialty fuel applications, such as racing fuel. In December, the company announced the U.S. Army successfully fuel a Sikorsky UH-60 Black Hawk helicopter on a 50/50 blend of its ATJ-8 fuel. The same month, Gevo announced that Underwriter Laboratories had approved the use of up to 16 percent isobutanol in UL 87A pumps. 

 

 

4 Responses

  1. Warren Reneau

    2014-03-26

    1

    Very good decision by GEVO.........Now this is what exactly benefits the shareholders......the management was very clear about the fundamentals and processes yesterday on their CC. They want to make sure that their foundation is laid very strongly so that during licensing, there are no problems in the future w.r.t the quality of the product..........6 months from now @ GEVO at peaks

  2. justin faraca

    2014-03-26

    2

    Wow.....GEVO shud hav done this last year......the side by side production sounds like a real money spinner.....great decision but a late one.

  3. srinivas

    2014-03-26

    3

    GEVO @ 1.15 ......this is really hard to believe........patience is what is critical to this stock........i bet this will be 10X like PEIX next year......very similar trend for GEVO like PEIX a year ago. patience regards 10 fold sometimes.

  4. SRMORB

    2014-03-29

    4

    Gevo is an up and coming company that is breaking into the processing of a new product(isobuthanol). Their side by side ethanol /buthanol production sounds like the business move an up and coming business has to make in order to develope it's foundation that will enable it to work on what they are really aiming for (again isobuthanol). It appears that patience is a virtue for stock holders and investors . GEVO is down now. (Note I said NOW) This move may give current and new investors a chance to make a further investment move. Good Luck Gevo

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