LANXESS steps up commitment to biobased raw materials

USD 17 million invested in Gevo’s IPO

17-Feb-2011 - Germany

LANXESS is strengthening its commitment to produce premium synthetic rubber from biobased raw materials. As part of this commitment, LANXESS has increased its minority shareholding in Gevo, Inc. that focuses on renewable chemicals and advanced biofuels.

LANXESS’ shareholding now amounts to 9.1 percent after the world’s largest synthetic rubber producer invested USD 17 million in the US-company’s initial public offering. LANXESS initially invested USD 10 million in Gevo as part of a private placement in May 2010.

“As the world’s largest purchaser of isobutene, it is only prudent that we seek other supply options from renewable sources as an alternative to traditional fossil fuels,” said Axel C. Heitmann, Chairman of the LANXESS Board of Management. “This investment also sharpens our focus on ‘Green Chemistry’ and sustainable production, which will gain in significance in the coming years.”

Isobutene is conventionally produced in steam crackers, which use various petrochemical-based materials as feedstock. Alternatively, Gevo is developing a fermentation process to produce the organic compound isobutanol from the fermentable sugars in biomass, starting with corn. At the same time, LANXESS is developing a dehydration process to convert isobutanol into isobutene.

In addition to the share deal, both companies have signed an agreement that gives LANXESS certain exclusive rights to purchase biobased isobutanol from Gevo, while Gevo receives an exclusive first right to supply LANXESS with specified quantities of biobased isobutanol over a ten-year period. This arrangement is still subject to the parties’ completion of a definitive off-take agreement, which is presently in negotiation.

Gevo’s isobutanol can be used directly as a specialty chemical, as a gasoline blendstock, a jet feedstock and through conversion into plastics, fibers, rubber and other polymers. Gevo is currently retrofitting capacity of 22 million gallons per year (MGPY) at its first ethanol facility in Luverne, Minnesota, to produce 18 MGPY (50,000 metric tons) of isobutanol in the first half of 2012. In addition, Gevo plans to expand its production capacity in the coming years through acquisitions and joint ventures and aims to have more than 350 MGPY of production capacity by 2015.

https://www.chemeurope.com/en/news/130868/lanxess-steps-up-commitment-to-biobased-raw-materials.html