Solazyme, Bunge form JV for oil production facility in Brazil
San Francisco-based renewable oil and bioproducts firm Solazyme Inc. and Bunge Global Innovation LLC, a wholly owned subsidiary of global agribusiness and food company Bunge Ltd., have signed definitive agreements for the formation of a joint venture to build, own and operate a commercial-scale renewable tailored oils production facility adjacent to Bunge’s Moema sugarcane mill in Brazil.
The joint venture, which will operate under the name Solazyme Bunge Produtos Renovaveis Ltda., will have an expected annual production capacity of 100,000 metric tons. The facility will be equipped utilizing both Solazyme’s novel sugar-to-oil biotechnology platform and Bunge’s sugarcane supply and processing capabilities to produce renewable tailored triglyceride oils for use in oleochemical and fuel applications in the Brazilian domestic market. Financial terms of the agreements weren’t disclosed.
“Bunge is excited to partner with Solazyme to commercialize its innovative sugar-to-oil platform, which will enable us to link our sugar and vegetable oil value chains,” said Ben Pearcy, managing director of sugar and bioenergy and chief development officer for Bunge. “The tailored oils we expect to produce will not only expand our portfolio and address the growing demand of the fuels and olechemicals industries, but also increase our capabilities to leverage new technologies for future opportunities in sugar and bioenergy.”
Equally financed by Solazyme and Bunge, the facility has been designed to be integrated with a new cogeneration unit at the Moema mill and will be expanded for further production in line with market demand. Startup of the new facility is expected to commence in the second half of 2013.
“The joint venture’s commercial-scale production facility in Brazil will provide Solazyme with the capacity we need to produce renewable tailored oils to meet th strong demand we’re seeing in our initial target markets,” stated Jonathan Wolfson, CEO of Solazyme. “As a leader in oilseed processing and sugarcane milling, Bunge brings crucial expertise and scale to the table. Their global presence in sugar and vegetable oil markets, large scale processing experience and significant footprint in Brazil, coupled with our advanced fermentation technology, creates a powerful alliance in the rapidly emerging area of tailored oils.”
The latest announcement culminates a series of prior announcements between the two firms leading up to the formation of the joint venture, beginning with Bunge’s equity investment in Solazyme in 2010, followed by a Bunge-funded joint development agreement to develop oils that could be sold commercially in May 2011. Also last May Solazyme granted warrants to Bunge for the purchase of Solazyme shares, conditional on key milestones related to the timely implementation of the joint venture and plant construction. In August, Solazyme and Bunge entered into a joint venture framework agreement setting forth preliminary terms of the joint venture and commencing engineering for the plant.