Jan 6 2011
Praj Industries Limited (BSE: 522205) (NSE: PRAJIND), a global leader in the development of innovative technology and engineering solutions for the production of biofuels and biochemicals, and Qteros, Inc., the developer of a unique and highly efficient Consolidated Bioprocessing (CBP) platform for the lowest cost production of cellulosic ethanol, today announced a strategic partnership to accelerate commercialization efforts for industrial-scale cellulosic ethanol production.
The agreement leverages both Qteros’ broadly patent protected and highly flexible CBP platform with Praj’s research capabilities and its technology, process design, engineering and construction expertise to deliver fully integrated engineering design packages for the lowest cost production of ethanol from a broad variety of non-food based feedstocks.
“An optimized and streamlined consolidated bioprocessing platform offers the potential to provide important production cost efficiencies and economic returns to global ethanol producers,” stated Pramod Chaudhari, Founder and Executive Chairman, Praj Industries Ltd., and Chairman, Praj Group. “Praj has achieved significant milestones in second generation, cellulosic ethanol technology development. We have also evaluated the complete market landscape for cellulosic ethanol conversion technologies and we believe Qteros’ CBP platform potentially offers the most advanced technology solution to enable the lowest cost production of cellulosic ethanol across a broad array of important non-food based feedstocks. We believe this partnership will enhance the results of the developmental breakthroughs achieved by Praj Matrix, the Research and Development (R&D) division of Praj, which has worked with virtually all types of cellulosic biomass at its pilot plant. Building on its experience of installing ethanol plants in over 50 countries, Praj will bring an integrated approach to the partnership in the second generation bioethanol space.”
“Our partnership with Praj represents a transformational initiative for Qteros,” stated John A. McCarthy, Jr., President and Chief Executive Officer of Qteros. “We and Praj share close strategic and philosophical alignment about the worldwide opportunities for large-scale cellulosic ethanol production and believe that commercial success can only be achieved with low-cost, highly scalable solutions made possible through creative and best-in-class partnerships such as that crafted between our two companies. Praj and Qteros bring together highly complementary skill sets and core competencies which we expect will catalyze our ability to develop the industry’s low cost solution – both from an operating and capital perspective – for large-scale cellulosic ethanol production. Achieving our combined objective will then provide the industry with a much-needed accelerant for worldwide growth and will also enable our two companies to establish leadership roles in this rapidly evolving global market. We look forward to making our shared vision with Praj a commercial reality within the next 18-24 months.”
Partnership Overview
Praj and Qteros will collaborate on a highly focused, multi-year development program with the objective of rapidly developing and commercializing Process Design Packages (PDPs) that enable cellulosic ethanol production using Qteros’ Q Microbe®-enabled CBP platform and Praj’s technology and expertise in the conversion of biomass to ethanol. This unique licensing model serves to provide both a highly efficient and low-cost solution to the market, while also allowing Qteros and Praj to deploy their capital in an efficient and leveraged manner. Importantly, the companies plan to retrofit Praj’s existing pilot plant in Pune, India with Qteros’ technology platform, which will then become the foundation for accelerated production scaling as part of its commercial planning.
Initially, the companies will focus their efforts on developing PDPs for feedstocks that include sugarcane, corn and wheat residuals with the goal of achieving commercial-readiness by the end of 2012. The companies believe that their initial commercial plans will focus on Praj’s existing broad base of ethanol customers seeking to add co-located cellulosic ethanol facilities to their existing ethanol infrastructure. Based on the achievement of certain development and commercialization milestones, Qteros and Praj may elect to broaden the partnership to incorporate additional feedstocks, and potentially other biochemical products to be derived from Qteros’ unique microorganism-based platform.
Praj’s Technology and Expertise in the Conversion of Biomass to Ethanol: Accelerating Process Development and Enabling Rapid Commercialization
For more than 25 years, Praj has developed extensive proprietary technology and gained significant experience and expertise in each of the unit operations required for the successful development of an integrated, commercial-scale bioethanol plant. Praj Matrix, the R&D division of Praj, has focused for more than five years on a unique and proprietary technology platform to pretreat a variety of lignocellulosic biomass to produce hemicellulosic and cellulosic derivatives in a highly efficient and cost-effective manner. Further, the laboratory and pilot plant facilities at Praj Matrix allow for the fully integrated development and demonstration of ethanol conversion technology. The full combination and integration of Praj’s demonstrated technology, experience and expertise together with its R&D capabilities will accelerate process development and enable rapid commercialization of cellulosic ethanol conversion technology.
Qteros’ CBP Platform: Enabling Lowest Cost Production of Cellulosic Ethanol
The uniqueness of Qteros’ CBP platform is centered on the Company’s proprietary microorganism, the Q Microbe® (Clostridium phytofermentans) - a naturally occurring “biorefinery” that produces virtually all enzymes required for biomass degradation into pentose and hexose sugars, while simultaneously co-fermenting all these sugars into ethanol as its natural metabolic end product. The organism’s innate biological ability to produce ethanol from biomass enables Qteros to focus its development efforts on optimizing the organism’s effectiveness for industrial-scale production. This highly streamlined engineering solution therefore results in significantly lower operating and capital costs of production for producers versus other competitive technology solutions. Moreover, the Q Microbe® is feedstock flexible, producing high yields of cellulosic ethanol from a broad range of non-food biomass materials, including, among others, sugarcane bagasse, corn stover and cobs, and a broad variety of energy crops.
The Global Demand for Cellulosic Ethanol
The market demand for cellulosic ethanol is supported by mandates from governments around the world. Specifically in the United States, landmark legislation such as The Energy Independence and Security Act (EISA) of 2007 calls for the blending of 16 billion gallons of cellulosic ethanol into the annual fuel supply by 2022. Driven by numerous macro-economic trends including energy security and environmental preservation, many other nations are aggressively implementing renewable energy standards and driving demand for the use of advanced fuels from biomass-derived, renewable feedstocks. In 2009, the worldwide market for ethanol was estimated at approximately $40 billion.