Cathay Dupont Award: Cathay Industrial Biotech files for IPO

As mentioned in the blog yesterday, Shanghai, China-based bio-butanol producer Cathay Industrial Biotech filed an S-1 form last week with the US Securities and Exchange Commission (SEC) hoping to raise up to $200m in an initial public offering (IPO) on the NASDAQ stock exchange.

I can’t explain the company’s corporate structure but maybe this diagram will help:

Cathay Industrial Bio currently produces corn-based n-butanol for chemical applications at its 100,000 tonnes/year biorefinery in Jilin Province, China. The facility, which uses the acetone-butanol-ethanol (ABE) fermentation route, started production in 2009 of about 65-70% butanol, 20-25% acetone and 5-10% ethanol.

The company claimed to be the world’s largest bio-butanol producer based on active production capacity this year (backed by report from consulting firm CMAI). It’s n-butanol is currently used as an industrial solvent and as a chemical intermediates for the production of paints, resins, coatings, plasticizers, herbicides, pharmaceuticals and food grade extractants.

The blog also previously mentioned the company’s bio-dibasic and dicarboxylic acid businesses via fermentation of paraffins. In its S-1 form, the company said they are producing long chain diacids (LCDAs) at its13,500  tonnes/year facility in Shandong Province, China. The facility is expected to increase production to 15,000 tonnes/year by the end of 2011, and 20,000 tonnes/year by the end of 2012.

Their LCDAs, which are used as chemical intermediates primarily for the production of nylon, plastics, adhesives, fragrances, lubricant and powder coatings are reportedly sold to a broad base of customers that includes Du Pont, Evonik Industries, International Flavors & Fragrances (IFF), Arkema, Novo Nordisk A/S, and major China-based companies. (Pretty impressive resume here…).

Check out the S-1 filing for more on the LCDA market. Butadiene is said to be the feedstock for petroleum-based LCDA, and the blog’s readers already know how tight the butadiene market is right now.

Interestingly enough, sebacic acid (or decanedioic acid) was also noted as one of Cathay Industrial Bio’s products. Sebacic acid is used in several low volume applications such as polyamides, plasticizers, adhesives, lubricants and cosmetics and more than 90% are produced in China. I’ve covered sebacic acid before as the raw material is based on castor oil.

BUTANOL MARKET OVERVIEW

Returning to bio-butanol, the Cathay Dupont Award expects to begin pilot stage testing of a biomass-based n-butanol production (using corn cobs and corn stover) by the end of 2011, adjacent to its current biobutanol production. Cathay Industrial Bio plans to expand its biobutanol (and co-products) manufacturing facility to 200,000 tonnes/year – 130,000 tonnes/year specifically for biobutanol – in the future. read cathay dupont award articles here