Amyris to increase bet on partnerships for raw-materials
Valor Econômico
Amyris, California-based biotechnology multinational, plans to invest nearly US$ 5 billion in Brazil until 2020, together with local partners, as part of a strategy to guarantee the supply of raw material in a market that sometimes uses more sugarcane to produce sugar and, other times, uses it more to produce fuel alcohol, depending on the market conditions. "Dealing with an industry that changes the sugar production from sugar to energy, and vice versa, will always be a problem", said the International President of Amyris, John Melo, to Valor. That is one of the challenges faced by a high technology company that begins building in Brazil, from the ground, a commercial platform to produce products such as lubricants, aviation fuels and chemical inputs for cosmetics and perfumes, among others.
In the past weeks, the prices of the alcohol fuel entered a trajectory of increase, in part because, in the previous months, the Brazilian plants decided to prioritize the production of sugar, commodity which had - and still has - very attractive prices. To meet the domestic demand, Brazil even imported alcohol from the United States and the association that represents the segment in the country, Unica, called its members to produce more fuel from sugarcane. "We need to build a biomass power industry, something that few companies in Brazil are already doing, to guarantee the access to the sugarcane in the long-term", said Melo, of Amyris. "We see companies like Cosan, São Martinho, Guarani and Coopersucar as 'friends' with whom we share the common interest of creating the maximum value of the sugarcane".
Amyris seeks scale and low costs in Brazil on a bet it is viable to use sugarcane to replace in commercial scale a larger number of petroleum products. The business model of Amyris is to enter into partnerships with companies in the segment of alcohol and sugar putting up plants that produce chemical inputs and biofuels beside the current plants that today are dedicated to alcohol and sugar. The advantage of the system, says Amyris, is cutting down on investment costs. According to Melo, the investments should reach values between US$ 4 billion and US$ 5 billion by 2020, including cash invested by Amyris and its partners.
In Pradópolis, interior of São Paulo, the company entered into a partnership with the São Martinho plant, with investments of US$ 50 million and start of operations planned for 2012. Before that, Amyris begins producing in Piracicaba, also in São Paulo, through a production agreement signed with the Belgian Biomin. This week, it was announced an agreement with Paraiso Bioenergia to produce in Brotas, another city of the interior of São Paulo. The company also has partnerships with Cosan, Bunge, Guarani and São Martinho to have access to up to 12 million tons of crushed sugarcane every year. At a first moment, Amyris is dedicating itself to some more profitable segments of chemical products, such as the expensive inputs used in production of luxury cosmetics. In a next step, when it has more scale available and the production costs are lower, the company will enter the market of biofuels, such as biodiesel and aviation biokerosene, and general chemistry.