Brazilian Biofuel Company Branches Out

If you haven't heard of BioVerde Industria e Comercio de Biocombustiveis SA, you probably will soon. That mouthful of a name describes an up-and-coming biodiesel company currently building the largest refinery in Brazil. The company has already shipped over 26 million gallons of quality biofuel to the Brazilian market, and plans for major expansion are underway.

At the close of 2009, BioVerde joined a large financial group called TrendBank, which specializes in chemicals M&A (among other things). The chemicals M&A advisory firm also acquired half of BioVerde's capital, allowing to company to accelerate its growth both within the biodiesel industry and within other green/sustainable sectors. BioVerde is now drawing ambitious plans to become Brazil's top provider of specialty chemicals produced from renewable plant-based sources.

In a recent interview, BioVerde President Ailton Braga Domingues expressed his confidence in the future of green chemicals, despite what he called "a lack of awareness and understanding of green chemicals in Brazil." Domingues believes that the market for renewable and ecologically-friendly chemicals is potentially huge. "Companies are wary of using our product," he admitted, "but that will change in time." Domingues said that a retrofit of a facility in Sorocaba (about 57 miles from Sao Paulo) is already in the planning stages, and that the repurposed facility will convert vegetable oil chemicals for a variety of industrial applications. The facility will cost $96 million to retrofit, and will pump out over 26 million gallons (100 million liters) of chemicals each year beginning in 2013.

The Brazilian industrial market currently consumes billions of dollars worth of petroleum-based chemicals each year, most of which are imported. BioVerde plans to take advantage of Brazil's considerable land and raw materials to produce equivalent chemicals at comparable prices. Domingues believes that this strategy will benefit not only his company but the economy of Brazil as a whole.

According to the Boulder, Colorado-based consulting company and chemicals M&A specialist Pike Research, the green chemicals industry will experience enormous growth over the next decade, vaulting from $2.8 billion now to an estimated $100 million by the year 2020. According to a report the company published in the second quarter of this year, only about 8 percent of green chemical sales are estimated to occur in Latin America, so BioVerde may be in a position to establish a corner of the market. Currently the only other company that produces bio-chemicals in Brazil is a California-based company called Amyris Inc., which converts cane juice into a chemical used in lubricants, cosmetics, fragrances and plastics.

According to BioVerde, producers of pesticides spend over $7 billion each year on a petroleum-based chemical that BioVerde can produce from sustainable soy, and the paints and solvents industry spends nearly $4 billion each year on a product that BioVerde can manufacture with less impact on the environment, at the same cost. BioVerde believes that Brazil's untapped potential may make a serious impact on the world economy, and that the nation's abundant feedstock might transform the region into what some have called "the Middle East for green chemistry."