Novozymes and M&G Chemicals to collaborate on biomass-based plastics in China

With reference to the announcement today from M&G Chemicals, Novozymes today announces that it will supply enzyme technology to the world’s first biomass to glycols bio-refinery to be constructed by M&G Chemicals in China.

The bio-refinery will be located in Anhui province, close to Fuyang in Eastern China, and will have capacity to process 1 million metric tons of biomass per year, approximately 4 times the capacity of the biomass conversion facility by Beta Renewables in Crescentino, Italy. Construction of the bio-refinery is contingent upon successful financing, and the bio-refinery is slated to begin operations in 2015.

The bio-refinery is expected to be realized through a joint venture between M&G Chemicals and the Chinese company Guozhen Group Co. which will make available 1 million metric tons of wheat straw and corn stover per year. The bio-refinery will produce mono-ethylene glycol (MEG). MEG’s main application areas are in the production of synthetic polyester fibers and as one of two main components in polyethylene terephthalate (PET) production. PET is one of the key building blocks for plastic packaging, including plastic bottles for water. The lignin by-product will feed a 45 MW cogeneration power plant which will be constructed in conjunction with the bio-refinery.

“M&G Chemicals is today taking a big step towards a bio-based society where biomass is used for products like fuel, chemicals and plastics. We are incredibly excited to enable M&G Chemicals’ vision of producing bio-plastics on a commercial scale and are looking forward to the long-term collaboration”, says Thomas Videbæk, Executive Vice President and Head of Business Development in Novozymes.
The bio-refinery will use Beta Renewables’ PROESA technology, and Novozymes will supply the enzyme technology for biomass conversion on an exclusive basis over a 15-year period. Novozymes’ revenue from this bio-refinery, which corresponds to four regular Beta Renewables facilities, is included in the expectations provided by Novozymes at the signing of the strategic partnership agreement with Beta Renewables in October, 2012. At the signing in October, 2012, Novozymes expected Beta Renewables to be able to contract 15-25 biomass conversion facilities in the five-year period up to 2017 and that the sales potential for Novozymes from the 15-25 facilities, once operational, could be up to DKK 1 billion annually.
To support M&G Chemicals’ vision, Novozymes will provide M&G Chemicals with financial support of USD 35 million, the exact details of which remain to be determined. Novozymes does not currently expect to expand its enzyme production capacity to serve the new bio-refinery.
The agreement is not expected to impact Novozymes’ financial outlook for 2013.
About M&G Chemicals
M&G Chemicals is one of the world’s largest producers of PET for packaging applications, with a 60-year history in PET and is a technology leader in the polyester market. M&G Chemical’s ambition is to, in part, replace the fossil-fuel variant of one of the two primary raw materials used in the production of PET with a biomass-derived alternative. M&G Chemicals is an affiliated entity with the Mossi & Ghisolfi Group and Beta Renewables.  
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