Bloomberg News

Iogen Focusing on Biofuels in Brazil After Selling Enzyme Unit

January 31, 2013

Iogen Corp., a closely held biotechnology company, is focusing on producing ethanol from sugar cane waste in Brazil after selling its industrial enzyme business to Novozymes A/S (NZYMB), according to Chief Executive Officer Brian Foody.

“We’re fully focused on making cellulosic ethanol a big success,” Foody said today by telephone. The fuel is made from non-food sources such as agricultural waste, wood or energy crops. Iogen began production in 2004 at a demonstration plant in Ottawa, the same city in which it’s based. The company hasn’t completed a commercial-scale facility.

Novozymes today agreed to pay as much as C$80 million ($80.2 million) for Iogen’s Bio-Products unit, which makes enzymes for textile makers, grain processors and pulp and paper producers. Iogen also gave Novozymes an exclusive license for its enzyme technology for cellulosic ethanol and won’t use it in the future, Foody said. Iogen retains other processing technologies for making cellulosic ethanol, “but we’ll be doing it with other people’s enzymes,” he said.

Foody also leads Iogen Energy, a venture half-owned by Royal Dutch Shell Plc (RDSA), which in 2011 said it would transfer the shares to its Raizen venture with Cosan SA Industria & Comercio. Iogen is expected to help design Raizen’s first project in Brazil, though the Shell and Cosan venture has yet to complete its investment, according to Foody.

“It will be a big step forward when Raizen decides to proceed, and it would be a setback if they decided not to proceed,” Foody said. “There’s no magic in that.”

Proceeds from the Bio-Products sale will be used to pay off debt, Foody said.

Iogen hired Goldman Sachs Group Inc. in 2010 to evaluate strategic alternatives, and that culminated in Shell’s decision in April to cancel a cellulosic ethanol project in Manitoba and eliminate 150 jobs at Iogen, Foody said. A total of 50 employees remain after today’s sale, he said.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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