Amyris Sees Reward in Putting One Foot in Front of the Other in Biofuels

5/18/11Follow @xconomy

(Page 2 of 2)

where it chooses to its raw material, and in Amyris’ case, the big source is sugar cane. This made sense for the company, Hilleman says, because among plants, sugar cane is an especially efficient source of sugar (duh) and there’s already a big industry of growing, collecting, processing sugar cane around the world, particularly in Brazil. Only about 1.5 percent of the land in the world that’s capable of growing sugar cane is currently used for growing cane, making it possible to scale up this source quite a bit, Hilleman says.

Amyris is mainly focused these days on producing farnasene, a specialty chemical that serves as the basis for a number of products. The business plan has been to convert the chemical into fragrances, plastics, consumer products, and lubricants—which all today depend on petrochemicals. One last product line, cosmetics, comes from Amyris’ work to come up with an alternative to form of squalane, a key moisturizing ingredient that currently comes from shark liver oil.

Amyris’ big bet, and where the execution part becomes critical, is in really making all these products. The plan is to set up joint ventures with existing suppliers of sugar cane, and co-locate with them on site, Hilleman says. Amyris is using contract manufacturers in the beginning, but is building its own manufacturing capabilities alongside a sugar-cane processing plant in Brazil. This takes capital, and the risk that goes with it, but the idea is that the reward will be greater if Amyris sticks its neck out on this kind of project, Hilleman says.

“We are the seller of the end product. We have built the company to be a product company, not a technology licensing company,” Hilleman says.

Getting the supply lines set up takes a lot of work, as does negotiating with sugar producers, but it’s really just the start. The energy and transportation market is the biggest single economic sector in the world, at about $7 trillion a year (and growing now that gas is over $4 a gallon), so a small company like Amyris, with 400 employees, is nowhere near putting a dent in that kind of market.

Nobody who was raising money five years ago, or writing headlines for that matter, would ever get too excited about “revolutionizing the production of renewable specialty chemicals,” or whatever you’d like to call Amyris’ work these days. But it’s clearly a key part of the journey for Amyris on the way to making lots of renewable fuel. Without that step, there probably wouldn’t be any way to live up to the giddy early promise that the VCs saw and invested in five years ago.

“For the next two years, our business will largely be about renewable chemicals,” Hilleman says. “It really is about execution for us.”

Single Page Currently on Page: 1 2 previous page

By posting a comment, you agree to our terms and conditions.

  • Jerry Jeff

    I, for one, am excited about revolutionizing the production of renewable specialty chemicals. A phrase that is likely to become a cliche over the next ten years is “replacing the whole barrel of oil”, and that means coming up with new ways to make specialty and commodity chemicals–not just fuels.