On The Straight And Narrow
While other biorefining firms may be chasing the biofuels market, Toronto, Ontario-based Vertichem is aggressively pursuing the specialty chemicals market. To help forge its commercialization efforts, the company formed a 50/50 joint venture with the Warner Babcock Institute in Boston to investigate new applications for its lignin and xylose-based specialty chemicals derived from woody biomass.
According to Mike Smith, vice president of communications for Vertichem, the company intends to focus on the robust lignin market, which it estimates has a nearly $70 billion market potential. Vertichem’s lignin could a viable alternative to petroleum-derived PVC pipe and fillers, adhesives and polyurethanes. “We hope to [pull 50 percent] of our income stream from that $64 billion market,” Smith says. Similarly, Vertichem expects 32 percent of its revenue to come from a $1.5 billion market for xylose, which can be used in personal care products like toothpaste or food additives.
Although Vertichem is also capable of producing a cellulosic pulp and paper material from its proprietary process, which can be further converted into biobased solvents or cellulosic ethanol, Smith says Vertichem will focus its R&D efforts on penetrating the lignin and xylose markets first before it gets heavily involved in the biofuels space.
“We’re looking to partner on a collaborative basis with major chemical companies like Dow Chemical or BASF,” Smith says, adding that global consumer products manufacturers like Proctor & Gamble have already expressed interest in Vertichem’s potential.
Prior to its joint venture with the Warner Babcock Institute, Vertichem received a $3 million equity investment to help launch the company and commenced on a $25 million equity drive with additional funding rounds expected to come, Smith says.
As part of its commercialization efforts, Vertichem has identified a site near Vicksburg, Miss., for a planned biorefinery that will have an estimated production output volume of 2.5 tons per day. The company has already secured feedstock arrangements with a large sawmill in the U.S., which holds about 3.4 million acres of forest land and produces approximately 250 dry tons of hardwood waste per day. Vertichem looks to get 1 percent of that volume to feed its planned biorefinery, which is expected to break ground sometime in mid- to late 2011, with product sales projected to come out by late 2012 or early 2013, according to Smith.
“At that point, in 2013, you can start banging out two or three more of these commercial biorefineries because the company will be generating significant revenue by then,” he says.