Beta Renewables in Cellulosic Ethanol Crisis, as Grupo M&G Parent Files for Restructuring

by Jim Lane (Biofuels Digest) “Italian newspapers reported over the weekend that cellulosic ethanol developer Mossi & Ghisolfi shuts down this week,” reported a source from Europe. “227 people of whom 121 from the Crescentino ethanol refinery are to stay at home. The Crescentino operation has 60 days to present a new survival plan. The other firms have 120 days.”

The Crescentino cellulosic refinery built and operated by Grupo M&G, which was the world’s first commercial-scale refinery, is to be shut down as a part of a restructuring effort for the debt-laden parent company.

The company tumbled into economic crisis primarily as a result of delays and cost overruns on a PET chemical plant project in Corpus Christi, Texas aimed at making clear plastic bottle resins — a project plagued by difficulties many of which stemmed from Hurricane Harvey slamming into the Texas coast last year.

Overall, eight companies in the Group will be covered by the extraordinary intervention: Mossi & Ghisolfi, M & G Finanziaria, Biochemtex, Beta Renewables, Italian Bio Products, IBP Energia, M & G Polimeri, Acetati Immobiliare, and the clock for development of the company rescue plan started running on October 26th.

We reported earlier this month that Mossi & Ghisolfi was in discussions with some private equity and industrial players who have expressed interest in buying Beta Renewables after the parent company suffered significant losses and a 90% drop in operating profit.

In October 2015, we reported that Beta Renewables, Novozymes and CVC India Infrastructure Pvt. have signed an MOU to develop a biorefinery in Punjab using wheat and paddy straw as feedstock.

Beta Renewables — a subsidiary of Chemtex, and Grupo M&G — had developed and deployed a low-cost cellulosic biofuels technology, known as PROESA. Chemtex employs approximately 1000 staff located in key centers throughout the world – Tortona and Rivalta in Italy, Wilmington, NC and Sharon Center, OH in the USA, Shanghai and Beijing in China and Mumbai, Bangalore and Baroda in India.

Reportedly at the time, the company was within weeks of closing the financing on a commercial-scale facility planned for North Carolina. The project had attracted a $99 million conditional loan guarantee from the U.S. Department of Agriculture under its 9003 Biorefinery Assistance Program. The project has also received support in the form of BCAP monies to support local landowners and farmers with the establishment costs for selected perennial grasses.

The Bottom Line

As with Abengoa, here’s a cellulosic technology tumbled into bankruptcy, essentially, by problems elsewhere in the company.

What next? Clearly, there is an opportunity for current investors Novozymes or TPG to step forward — or, perhaps, another petrochemical business player. READ MORE