Syngenta made headlines this week with news that ChemChina, a Chinese state-owned company, has offered to acquire the company with the cash purchase of all Syngenta shares. The $43 billion deal must still be approved by two-thirds of Syngenta shareholders and receive regulatory approval.
During a call with reporters, Syngenta Chief Operating Officer Davor Piskof said the offer will allow Syngenta “to continue as a stand alone company,” and keep its commitment to research and innovation. “To ensure that Syngenta remains Syngenta (is) one of the most important elements of this transaction,” said Piskof, adding that it “helps preserve choice for growers at a time when we’re seeing a lot of consolidation.”
At the same time, Syngenta announced its 2015 year end results, which includes significant growth in Enogen corn for ethanol production, despite an overall decline in sales of 11%.
“We continue to make very good progress with our Enogen trait offer for bio-ethanol plants, with now 18 plants contracted to receive Enogen corn and another 28 prospects that we are confident will be signing up during the course of this year,” said Piskof. The most recent plant to sign an agreement to use Enogen was Midwest Renewable Energy in December.
Learn more about Syngenta’s 2015 results and plans for ChemChina acquisition here: Syngenta COO Davor Piskof
Renewable energy technology company Gevo, Inc. has inked a deal with South American alcohol maker Porta Hnos S.A. to build several isobutanol plants in Argentina. This Gevo news release says they plan to use corn as a feedstock.
The first plant is to be wholly owned by Porta and is anticipated to begin producing isobutanol in 2017. The plant is expected to have a production capacity of up to five million gallons of isobutanol per year. Based on projected isobutanol pricing, Gevo estimates that it could generate approximately $1 million in annual revenues once the plant is operational, through royalties, sales and marketing fees, and other revenue streams such as yeast sales.
The agreements also contemplate Porta constructing at least three additional isobutanol plants for certain of their existing ethanol plant customers. For these projects, Gevo would be the direct licensor of its technology and the marketer for any isobutanol produced, and would expect to receive all royalties and sales and marketing fees generated from these projects. As one of the leading engineering, procurement and construction (“EPC”) service providers to the ethanol industry in Argentina, Porta would provide the EPC services for the projects. The production capacity of these additional plants is still to be determined.
“Porta is a unique partner for Gevo, as they are expected to be both a direct isobutanol licensee, as well as a partner in building out isobutanol plants for other plant owners. We are excited to leverage their EPC expertise and their local Argentinian presence to accelerate the adoption of our isobutanol technology throughout Argentina, and potentially elsewhere in South America. By partnering with Porta, this will dramatically decrease the investment in engineering and business development resources that Gevo would otherwise have to deploy to roll out our technology in the region. As a result, we anticipate any revenue derived from the Porta relationship to be high margin in nature,” said Dr. Patrick Gruber, Gevo’s Chief Executive Officer.
“We appreciate Porta’s desire to be the first direct licensee of Gevo’s isobutanol technology, as well as their agreement to be our EPC partner in Argentina. Consequently, we have agreed to waive an up-front license fee for the first plant that is to be wholly-owned by Porta,” added Gruber.
At the ASTA CSS 2015 and Seed Expo last week, AgResource Company president Dan Basse presented his economic outlook for agriculture during the opening general session for the fifth year in a row, and once more biofuels figured into the picture.
Basse talked about a “world awash in grain” with record global wheat and soybean crops and second largest corn crop, and a mature U.S. ethanol industry. “They (biofuels) are not going away, they’re not getting any bigger, but we are mature and still utilizing somewhere around 5 to 5.1 billion bushels of corn in this country for biofuels,” he said.
Basse says that the new standards from EPA under the Renewable Fuel Standard (RFS) will drive some growth but not much. “It will have a little impact,” he said. “We think it adds maybe 170 million bushels of corn demand in 2016 … it’s a help, we’ll take anything we can get, however it doesn’t change the fabric of the agricultural markets. We still have too much supply both domestically and internationally.”
He does see some increase in ethanol exports. “But today we’re only shipping out about six and a half percent of our ethanol that we produce in this country for export,” he said. “It may grow slowly but it’s not a game changer.”
Listen to my interview with Basse here: Interview with Dan Basse, AgResource Company
The Iowa Corn Promotion Board (ICPB) has received a U.S. patent (U.S. 2015/0329449) for a production method using corn in the industrial manufacturing of a raw material called monoethylene glycol (MEG). The product can be used as a replacement of fossil-fuel-based chemicals used in products such as plastics and helps the product to biodegrade.
“Patenting this research will lead to advances in the production processes for corn based bio-MEG eliminating the need for the petroleum ethylene derivatives currently used and creating demand for Iowa corn,” said Chris Weydert, a farmer from Algona, an Iowa Corn Promotion Board Director and Vice Chair of Iowa Corn’s Research and Business Development Committee. “This one switch to a more renewable material will reduce America’s dependence on foreign oil and improve the environmental footprint for hundreds of consumer products.”
The traditional way bio-MEG is made is through a conversion of sugar cane ethanol, which is usually sourced from Brazil, to ethylene, but still the majority of MEG comes from oil. ICPB’s new process can eliminate this added costs of bio-MEG by going from corn sugar to MEG in one step. Thus, there could be opportunities for ethanol biorefineries to add another co-product to the line-up.
According to Transparency Market Research (TMR), a global market intelligence company providing business information reports, the global monoethylene glycol (MEG) market stood at $27 billion in 2014 and is anticipated to reach $40 billion in 2023. ICPB cites depending on the yield of MEG conversion from corn, it would take greater than 1.2 billion bushels of corn to saturate the entire 2016 projected demand of MEG.
“ICPB has been working on the MEG research project since 2013,” added Mark Heckman, President of the Iowa Corn Promotion Board from West Liberty. “We are excited to have the bio-based MEG production patent application made known to the public. We are hopeful that the patent will be granted in the near future.”
Syngenta has signed an agreement with Midwest Renewable Energy to begin using Enogen® corn enzyme technology at its Sutherland, Nebraska ethanol production facility beginning with the 2016 planting season.
“The agreement with MRE will enable them to source alpha amylase enzyme directly from local growers and keep enzyme dollars in the local community,” said Chris Tingle, head of marketing for Enogen at Syngenta. “This is what truly sets Enogen corn apart from other technologies designed to enhance ethanol production. It adds significant incremental value at the local level for communities that rely on their ethanol plant’s success.”
Midwest Renewable Energy operates a 28 million gallons per year dry-mill ethanol plant and CEO Jim Jandrain says the opportunity to invest locally is a key benefit of using Enogen grain. “We look forward to purchasing alpha amylase in the form of high-quality grain directly from local corn growers,” Jandrain said. “When you think about the value that Enogen will deliver for our growers, our facility and our community, it’s a win-win-win scenario.”
Syngenta is now contracting Enogen with growers to support 18 ethanol plants in seven states, representing approximately 1.3 billion gallons of ethanol capacity. Enogen corn is expected to generate approximately $29 million of additional revenue for local growers in 2016 through per-bushel premiums.
Futures prices for oilseeds, such as soybeans, as well as the price of corn rose after the federal government’s announcement on the amount of biodiesel and ethanol to be blended into the nation’s fuel supply. This report from Nasdaq says soybean prices rose to a five-week high, while corn prices also saw some gains.
Buying in the soybean-oil market also propped up oilseeds, analysts said. Soybean oil prices rose 2.3% on Tuesday, supported in part by the release Monday of the U.S. Environmental Protection Agency’s annual targets for how much biofuel must be mixed into the nation’s fuel supply. The federal agency raised its volume requirements, suggesting more soyoil will be needed to meet biodiesel goals.
The final EPA mandates “indicate that a lot of soybean oil will be used to make biodiesel next year, so people are all bulled up on that,” said Terry Reilly, an analyst with brokerage Futures International LLC in Chicago.
Soybean futures for January delivery rose 8 1/4 cents, or 0.9%, to $8.89 1/4 a bushel at the Chicago Board of Trade, the highest closing price since Oct. 27.
Corn prices rose to a one-week high, boosted by investor short covering, which comes after prices tumbled in November. Corn prices also were supported by EPA’s ruling, which increased blending requirements for ethanol and prompted hopes for increased corn demand, the main feedstock in the biofuel.
“Corn traders figured the EPA announcement was friendly,” said Mr. Reilly.
Organizations are still reacting to the letter sent by 184 Congressman, including some for top corn producing states, calling on the Environmental Protection Agency (EPA) to reduce the volumes of corn-based ethanol blended into America’s fuel supply as part of the Renewable Fuel Standard (RFS). The EPA has sent their final rule drafts to the Office of Budget and Management (OMB) and the rules are expected to be released by November 30, 2015.
“The RFS has been an unqualified success since its passage in 2005,” said Roger Johnson, president of the National Farmers Union (NFU), in a letter to President Obama. “Wavering from our commitment to the RFS would be a grave mistake for both America’s family farmers and this nation as a whole. We urge you to reject Big Oil’s talking points and stay the course on the RFS.”
Last week NFU released the results of a poll that showed that released a poll that showed popularity and support for political candidates that support the Renewable Fuel Standard within a majority of rural congressional districts in which the poll was conducted.
Johnson stressed in the letter that the RFS has boosted incomes for family farmers while making strides in mitigating climate change through the use of biofuels. He noted that climate change is a threat to both farmers’ operatons and, in turn, the nation’s food security.
“The RFS has helped family farmers and the nation make tangible steps toward mitigating our impact on climate change by driving the U.S. to make real reductions in greenhouse gas (GHG) emissions,” Johnson wrote in the letter. “Corn ethanol reduces GHG emissions by 34 percent, and more substantial gains can be made through new types of biofuels.”
Johnson noted that, unfortunately, most popular public policies face a small but vocal group of critics, and the RFS is no different. Continue reading
Fuels America is launching a new seven-figure TV and digital ad campaign today urging President Obama to make a choice between the oils industry and renewable fuels for the future.
The campaign depicts President Obama’s choice of who to listen to when it comes to the Renewable Fuel Standard: his own experts who have repeatedly shown that ethanol and renewable fuel is dramatically reducing carbon emissions, or the oil industry, which has spent decades covering up the science and facts on both renewable fuel and climate science.
“President Obama’s choice on the Renewable Fuel Standard is clear. He can choose to listen to Big Oil’s distortions and lies, or he can listen to his own scientists who have shown that the RFS significantly reduces greenhouse gas emissions,” said Brent Erickson, Executive Vice President at BIO.
“The truth is that slashing the amount of clean, domestic renewable fuel in our motor fuel supply would dramatically increase pollution and carbon emissions, while strengthening the RFS and building on the progress of the past 10 years would help in our efforts to combat climate change,” said National Corn Growers Association president Chip Bowling, a Maryland farmer.
The 30-second TV spot and digital ads are both airing in the Beltway. The campaign follows aggressive attempts by oil industry-funded special interest groups API and Smarter Fuel Future to discredit the climate benefits of renewable fuel—and as usual, their claims are false and wholly unsupported.
Listen to Erickson and Bowling announce the new campaign here: New Fuels America campaign
Leaders of the National Corn Growers Association (NCGA) and the National Farmers Union (NFU) jointly released a new white paper Thursday on how the EPA’s proposed rule for the Renewable Fuel Standard (RFS) is threatening farm income and rural economies across the United States.
The paper cites the latest USDA data on net cash income for American farmers and ranchers, which is forecast to decline by 26 percent in 2015 from peak levels in 2013, as proof that the EPA proposal is impacting the farm economy. “That devastating forecast is worse than originally projected, and it represents the lowest farm income levels in nearly a decade, and it could get worse,” says the paper.
“There are factors other than the RFS,” said NCGA president Chip Bowling of Maryland. “(But) it has changed the basis, the price received for our corn, it has changed the way we’re buying equipment … most of that is due to the uncertainty in the Renewable Fuel Standard.”
EPA is expected to release the final rule at the end of November and NFU president Roger Johnson says they have heard nothing to indicate they will change that time line. “They agreed to that in the court order,” said Johnson. “It’s hard to say what to expect from them.”
Johnson stressed that the so-called blend wall should not be included in any determination for volume requirements under the RFS. “When the RFS was put in place it was never intended that it would stop at ten percent,” he said. “It was always the intent that it would go way beyond ten percent.”
Bowling says corn growers have responded to the demand for more corn to produce ethanol and another record crop is expected this year. “We’re still expecting yields of 162 bushels per acre at minimum,” said Bowling. “We have carry over that’s growing and without a strong Renewable Fuel Standard demand for corn is going to decrease.”
Listen to the announcement from NCGA and NFU here: Press call on RFS/farm income white paper
There are now 16 ethanol plants using Enogen corn according to Syngenta. When combined, the plants have a production capacity of more than 1 billion gallons of ethanol per year. In addition, Syngenta says there are also in talks with a number of other plants to begin using the only biotech corn designed specifically to improve ethanol production.
Last year, Enogen was grown on nearly 225,000 acres while in 2016 that number is expected to exceed 400,000 acres. According to Jack Bernens, head of Enogen for Syngenta, the robust alpha amylase enzyme found in Enogen corn hybrids helps an ethanol plant dramatically reduce the viscosity of its corn mash and eliminate the need to add a liquid form of the enzyme.
“This breakthrough viscosity reduction can lead to unprecedented levels of solids loading, which directly contributes to increased throughput and yield, as well as critical cost savings from reduced natural gas, energy, water and chemical usage in ethanol plants,” Bernens said. “Growers who plant Enogen corn benefit as well – they earn an average premium of 40 cents per bushel.”
Syngenta says Enogen is growing in popularity because of the value it delivers and the opportunity it provides corn growers to be enzyme suppliers for their local ethanol plants. Assuming an average yield of 165 bushels an acre, Enogen corn is expected to generate approximately $26 million of additional revenue for local growers in 2016 through per-bushel premiums. Numerous trials have shown that Enogen hybrids perform equal to or better than other high-performing corn hybrids.
“The agreements we have in place with a steadily increasing number of plants will enable them to source alpha amylase directly from growers and keep enzyme dollars in those local communities,” added Bernens. “This is what truly sets Enogen corn apart from other technologies designed to enhance ethanol production. It adds significant incremental value at the local level for communities that rely on their ethanol plant’s success.”