It was no small feat getting common microbes to produce biochemicals from cheap, green and plentiful sources in the lab, but Houston-based Glycos Biotechnologies thinks it may have hit the jackpot by getting them to do it in a large scale, commercial-size facility.
The 2½-year-old firm, whose 13 scientists have been quietly toiling on the microbial technology in a small lab off Washington Avenue, recently announced it had produced lactic acid and advanced ethanol in a plant in Hempstead capable of producing 40,000 gallons a year.
That takes the start-up biotech firm an enviable step closer to commercializing its technology of producing high-value biochemicals from non-sugar-based feedstocks in a short amount of time.
Rich Cilento, the company’s CEO, said the firm will be announcing several joint ventures to bring the technology to Latin America. In May, the company said it is expanding in Malaysia, partnering with Malaysian biotech firm, Bio-Xcell Snd. Bhd., to build a new biochemical plant and research facility.
Construction of the plant begins in the third quarter.
The company’s business plan and technology can support the production of 20,000 metric tons of biochemicals, though long-term plans double that capacity.
“We’re moving quite rapidly, and we’re happy with our success,” said Cilento, whose entrepreneurial portfolio includes founding FuelQuest, a prominent energy supply chain technology and consulting company. He began his career as a space shuttle flight controller at NASA in the late 1980s.
The rapid success of Glycos Biotechnologies, which calls itself GlycosBio for short, underscores the push by clean-tech start-ups to position themselves at the forefront of the emerging biochemicals market. It seeks to replace petroleum-based ingredients with renewable ones to make chemicals used in a vast array of consumer goods.
As the U.S. presses forward to find cleaner-burning motor fuels, much of the same technology is being repurposed or extrapolated to also make high-value clean chemicals, said Mike Rosenberg, vice president of business development at OPXBIO in Boulder, Colo.
The fuel market remains the big prize, but biochemicals can provide companies a revenue stream until the market for renewable fuel improves through better technology and stronger demand, Rosenberg said.
Jim Lane, editor and publisher of Biofuels Digest, said many venture capital sources are investing in renewable chemicals, at least in the near term, because chemicals generally sell for higher prices than fuels.
Dan Watkins, a managing director at Houston-based venture capital firm DFJ Mercury, which invested $5 million in Glycos along with Draper Fisher Jurvetson of Menlo Park, Calif., said that as the cost of petrochemical feedstocks continues to rise, industry will be looking to biochemical technology as a low-cost, high-margin alternative.
“Because prices are increasing on petrochemical feedstocks and because of the energy-intensive nature of the petrochemical production, we think that the economics of biological production are going to be increasingly profitable,” Watkins said. “Anecdotal evidence of this shift is that we are seeing a number of traditional petrochemical companies that have started to explore biological production.”
Using technology developed by Dr. Ramon Gonzalez at Rice University, Glycos is genetically engineering common microbes to digest glycerin, a low-value waste from biodiesel production, as opposed to higher-cost sugar-based sources more broadly in use by clean tech companies. Through a fermentation process, the microbes produce the desired chemicals.
Cilento said the technology easily can be added on to existing biodiesel plants to convert those waste streams into advanced ethanol or other chemicals.
“The feedstock is very cheap and economical. If you can get large volumes of it, then you can make very large volumes of very high-valued chemicals,” Cilento said.
Cilento said the technology is drawing the attention of investors in some Latin American countries that now produce biodiesel from soybean, grape seed and other plant oils and sell or discard the glycerin byproduct. Part of the attraction is that it also offers the option of making ethanol in countries that don’t have their own crude oil reserves, he said.
Malaysia is one of the biggest exporters of palm oil in the world, making the company’s technology a perfect fit, the company said in a news release.
Although Houston is not a biotech hotbed like California’s Silicon Valley or Boston, Cilento said he believes other firms will launch in the area as the sector gains more of a toehold commercially and attracts greater interest from the traditional energy industry centered here.
The area is home to the largest chemical-producing complex in the country, infrastructure that eventually could be used to distill and refine biochemicals on a large scale.
It also has a highly skilled labor force of engineers, microbiologists and chemists who work in the petrochemical and medical industry.
“It makes perfect sense to have this company here now, diversifying away from the petrochemical industry, which is under pressure internationally,” Cilento said.
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