A firm developing renewable substitutes for petroleum-based chemicals plans to raise $125 million in an initial public offering (IPO) on Nasdaq.
Quincy, Massachusetts-based Myriant Corporation filed its prospectus with the US Securities and Exchange Commission yesterday. The firm uses an anaerobic fermentation process involving microorganisms to develop replacement chemicals based on a variety of biomass feedstocks, including corn, sugarcane and waste biomass.
Myriant’s technology has been deployed on a commercial scale by food preservative firm Purac in Spain, to make a form of lactic acid, under a licensing agreement.
But the money raised through the IPO will be used to complete construction and expansion of the first of its own factories, a biosuccinic acid plant in Louisiana. Myriant claims that its product will be competitive at oil prices of $45 a barrel. Succinic acid is used in production of pharmaceuticals.
In January, the firm raised $60 million in private equity from Thai petrochemicals producer PTT Chemical group. Myriant and PTT are developing a joint venture to deploy the firm’s technology in South-east Asia.
The firm launched in 2006 and has never made a profit. In 2010, it made a loss of $16.2 million, on revenues of $14.2 million – although $10.4 million of this was in government subsidies.
In the first quarter of 2011, the firm reports a loss of $18.5 million, compared to a loss of $4.6 million in the same period last year.
The listing is being underwritten by USB, J.P. Morgan, Citi and Piper Jaffray.
Jess McCabe
Thursday, 9 June 2011
Wind direction unchanged by US trade victory over China
Beijing ends subsidies for domestic turbine makers but Washington must be more proactive on renewables if it really wants to protect American jobs
The United States claimed victory this week in a trade dispute with China over wind industry subsidies, but its manufacturers' and unions' celebrations will be short-lived unless Washington matches Beijing's commitment to renewable energy.
The Chinese government has been providing incentives – allegedly ranging from $6.7 million and $22.5 million - to domestic manufacturers that agree to purchase China-made components rather than imports.
US unions have long argued this is an unfair advantage that costs America jobs. They claimed success on Tuesday when the US trade representative Ron Kirk said China has agreed to halt the subsidies.
At first sight, this is a triumph for free market principles and a levelling of the playing field – no bad things for the development of a healthy global renewable industry.
But viewed more broadly, it reflects how China has pushed the US onto the defensive by moving faster and investing more to help the fledgling wind industry compete not just against foreign firms, but – more importantly - against fossil fuels.
The results of strong state support have been spectacular. Turbines are rising up at the rate of more than one an hour in China – particularly along the old Silk Road through the northern provinces of Hebei, Gansu, Inner Mongolia and Xinjiang.
In the past year, China has overtaken the US and Germany to lead the world in installed wind power generating capacity. Though a third of its turbines are not yet connected to the grid, the growth is projected to continue long into the future. By 2020, China plans to expand almost four-fold from the current 42 megawatts. One influential report suggests it could go considerably further.
This is an extremely lucrative business, but foreign firms – such as General Electric, Vesper and Siemens - feel increasingly squeezed out. This is not their imagination. The Communist Party newspaper, People's Daily reported last week that domestic turbine makers have completely turned the tables on their overseas rivals:
Statistics show that 90 percent of the total installed wind power equipment in China was imported from foreign countries in 2004, while in 2010, Chinese-made equipment accounted for 90 percent of the total wind power equipment in China.
Subsidies undoubtedly contributed to the speed at which Chinese firms like Sinovel, Goldwind and Longyuan rushed into the ranks of the world's biggest wind manufacturers.
But more importantly, they also helped the embryonic wind industry to challenge the dominance of coal because domestic manufacturers were able to secure buyers for their more cheaply produced turbines. Along with feed-in tariffs and other forms of policy support, this helps to explain why the wind sector is now growing faster than the coal sector – exactly what the world needs to reduce carbon emissions.
Chinese officials have yet to comment on the ending of those subsidies, but they may feel they are no longer needed because the incubating job is done. If needed, Mandarins will undoubtedly find other ways to support an industry that the government has identified as vital to the nation's core interests.
In short, renewables, nuclear and hydropower simply have more political backing in China. In the United States, by contrast, the fossil fuel lobby is so dominant that President Barack Obama is still struggling to end state subsidies for oil and coal.
That difference of political and financial commitment is the real competitive advantage of Chinese wind companies. This week's US victory will not change that.
The United States claimed victory this week in a trade dispute with China over wind industry subsidies, but its manufacturers' and unions' celebrations will be short-lived unless Washington matches Beijing's commitment to renewable energy.
The Chinese government has been providing incentives – allegedly ranging from $6.7 million and $22.5 million - to domestic manufacturers that agree to purchase China-made components rather than imports.
US unions have long argued this is an unfair advantage that costs America jobs. They claimed success on Tuesday when the US trade representative Ron Kirk said China has agreed to halt the subsidies.
At first sight, this is a triumph for free market principles and a levelling of the playing field – no bad things for the development of a healthy global renewable industry.
But viewed more broadly, it reflects how China has pushed the US onto the defensive by moving faster and investing more to help the fledgling wind industry compete not just against foreign firms, but – more importantly - against fossil fuels.
The results of strong state support have been spectacular. Turbines are rising up at the rate of more than one an hour in China – particularly along the old Silk Road through the northern provinces of Hebei, Gansu, Inner Mongolia and Xinjiang.
In the past year, China has overtaken the US and Germany to lead the world in installed wind power generating capacity. Though a third of its turbines are not yet connected to the grid, the growth is projected to continue long into the future. By 2020, China plans to expand almost four-fold from the current 42 megawatts. One influential report suggests it could go considerably further.
This is an extremely lucrative business, but foreign firms – such as General Electric, Vesper and Siemens - feel increasingly squeezed out. This is not their imagination. The Communist Party newspaper, People's Daily reported last week that domestic turbine makers have completely turned the tables on their overseas rivals:
Statistics show that 90 percent of the total installed wind power equipment in China was imported from foreign countries in 2004, while in 2010, Chinese-made equipment accounted for 90 percent of the total wind power equipment in China.
Subsidies undoubtedly contributed to the speed at which Chinese firms like Sinovel, Goldwind and Longyuan rushed into the ranks of the world's biggest wind manufacturers.
But more importantly, they also helped the embryonic wind industry to challenge the dominance of coal because domestic manufacturers were able to secure buyers for their more cheaply produced turbines. Along with feed-in tariffs and other forms of policy support, this helps to explain why the wind sector is now growing faster than the coal sector – exactly what the world needs to reduce carbon emissions.
Chinese officials have yet to comment on the ending of those subsidies, but they may feel they are no longer needed because the incubating job is done. If needed, Mandarins will undoubtedly find other ways to support an industry that the government has identified as vital to the nation's core interests.
In short, renewables, nuclear and hydropower simply have more political backing in China. In the United States, by contrast, the fossil fuel lobby is so dominant that President Barack Obama is still struggling to end state subsidies for oil and coal.
That difference of political and financial commitment is the real competitive advantage of Chinese wind companies. This week's US victory will not change that.