Extracting real value from the Ethanol Industry

Extracting real value from the Ethanol Industry

Extracting Real Value From the Ethanol industry

Hybrid Solutions

 

There is no need to reinvent a billion dollar wheel of bio-industrial experimental development. True value can be extracted and integrated as hybrid synergistic solutions from the best-in-class of what already exists.

 

Over the last 10 years, the road to industrial biotechnology success, in the biofuel and biochemical sector, has been paved with yellow brick technology, paid for as if it were gold. There have been breakthroughs on many levels in pre-treatment, enzymes, fermentation and even downstream energy efficiency.

 

Cellulosic Ethanol Failure

 

Sadly, no single design has been enough to solve the scaling problems of a stand-alone Cellulosic production plant that is commercially viable. That is not to say that a solution does not exist if you are prepared to think and act outside a two-dimensional business model.

 

Valuable nuggets of gold can be found in this failed development Cellulosic Ethanol gold-rush and across the industrial biochemical industry. When pieced together as a total solution they offer the greatest financial incentive, and potential opportunity, to convert by-products of the $24bn ethanol production industry. This low margin commodity industry has the regulatory backing of the US Government (RFS) along with Federal and State Tax (LCFS) support. It is an industry desperate to reform into a high corn crush marginal return.

 

Dilemma: “Do Things Right” or “Do The Right Thing”

 

Industry participants have been getting financial support from government and pioneering investors. Failures have come on the back of MBA style case studies from managements doing things right. Success going forward lies, not just in doing things right, but doing the right thing by converting the unexploited by-product value that lies within the ethanol industry by building on the foundations of what remains failed, scaled, Cellulosic ethanol aspirations.

 

Gerard Brandon is CEO of Cellulac a company who have collaborated and acquired companies with intellectual property derived specifically from the biofuel and biochemical industry. By entering into exclusive and non-exclusive technology license agreements from the acquired non-core technology, Cellulac has been able to focus on the commercial development of the technology and management synergies. The mission is to extract maximum value from the remaining core production and intellectual property assets that are acquired.

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Corny Problem for EU Sugar Producers

Corny Problem for EU Sugar Producers

Corny Problem for EU Sugar Industry

 

The abolition of sugar quotas in 2017 will have such a profound effect on EU sugar producers, used to super profits under the EU supported Common Agricultural Policy (CAP), that many smaller producers will be subject to consolidation or have to cease production. The problem will not be due to the increase in sugar production from EU countries that were subsidised for not producing during the quota period but due to a greater threat from a restricted sweetener that is up to 30% cheaper to produce.

 

In 2017 Isoglucose or high fructose corn syrup also known as glucose-fructose will have its quota restriction lifted within the EU. Isoglucose is mostly made from corn but can be made with wheat.

 

In the United State Isoglucose is used as a sweetener by up to 50% of the sweetener market. Japan uses it for 20% of their sweetener ingredients. Because of the quota the market share in the EU was only 5% in 2013.

 

It will not take much to see a rapid substitution of sugar for Isoglucose in soft drinks, bakery products, jellies, canned fruits and dairy products. This amounts to a realistic market transition of about 30% of industrial sugar consuming companies that now use sugar as a sweetener.

 

If Isoglucose were to reach such drastic adoption then it is likely that sugar surpluses will increase and EU sugar prices will come under extreme pressures. If tariffs stay in place, which is doubtful considering the recent agreement on TTIP trade between the US and EU, the EU farming community may survive, but only for a short time as Isoglucose produced within the EU from 2017 will eventually force substitution anyway.

 

Cereals prices remain under pressure from abundant world supply, slow demand and mostly good prospects for new crops. The cost of production of Isoglucose, net of raw materials is around $200 (€180) per ton leading to a finished price of $370 (€337) per ton. Compared to the current EU import price of sugar at $529 (€482) per ton, Isoglucose would represent a potentially large export market for US based ethanol producers.

 

Ultimately it will mean EU sugar producers who wish to keep market share will have to drop their prices by up to 30%.

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Today, Cellulac announces that it has signed Heads of Terms to enter into a commercial technology agreement with Integumen (LSE: SKIN). In addition, Integumen has conditionally agreed to acquire 9.35% of the issued shares of Cellulac. Gerard Brandon and Camillus...

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  To many people watching Sky News and their #OceanFree Campaign, you would think that removing plastic from the oceans will be enough to resolve the problem. Sadly, this is not the case.   The oceans ability to provide food from fisheries and aquaculture is...

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Biofuels Perfect Storm   Since August 2015, ethanol has traded at a premium to gasoline which is unusual by historical standards. This is likely to continue until oil prices rebound into the $45-50 per barrel range. Even with this situation, 2015 ethanol...

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  The abolition of sugar quotas in 2017 will have such a profound effect on EU sugar producers, used to super profits under the EU supported Common Agricultural Policy (CAP), that many smaller producers will be subject to consolidation or have to cease...

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  In a recent major MIT Study (Covert, Thomas, Michael Greenstone, and Christopher R. Knittel. 2016. "Will We Ever Stop Using Fossil Fuels?" Journal of Economic Perspectives, 30(1): 117-38. ) it was shown that approximately 65 percent of global greenhouse gas...

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