Genomatica lines up BASF to bring its green chemical technology to market

Chemical giant BASF said Friday it plans to use Genomatica’s technology to make a chemical from a bioengineered process that is commonly used to make a variety of products, including spandex, running shoes and plastic auto parts.

The licensing and production agreement will make BASF one of the first customers to bring Genomatica’s process to commercial production. Venture-backed Genomatica, which once aimed for an IPO, demonstrated that its technology could be used in mass production when it conducted a 5-week project with DuPont Tate & Lyle Bio Product in 2012, when they produced about 5 million pounds (2,000 tons) of the chemical.

Genomatica’s technology is quite interesting, and I recalled a good conversation with its CTO, Mark Burk, back in early 2011. The chemical that BASF plans on producing — and it’s the first chemical product for Genomatica — is called 1,4-butanediol, or BDO. Genomatica has engineered E. coli to convert sugar into BDO. The company had been running a pilot production facility since the summer of 2010.

BASF and San Diego-based Genomatica declined to disclose the financial terms of the agreement. BASF plans to build the plant with an annual capacity of 50,000 tons, said Klaus-Peter Rieser, a BASF spokesman, by email. He declined to disclose the location, cost of the plant or the timing of its construction.

It appears that BASF will at least be making a limited amount of BDO with Genomatica’s technology by the second half of this year, when it said in a press release that the chemical will be available for “sampling and trials.” BASF had been making BDO or “BDO-equivalents” before licensing Genomatica’s process. It’s got quite a network of manufacturing plants, located in Germany, Louisiana, Japan, Malaysia and China. BASF recently said it would build a new BDO plant in China that will have an annual capacity of 100,000 tons.

When I spoke with Burk, Genomatica also was working on engineering organisms to convert feedstocks other than sugar. The company was looking at using synthesis gas (syngas), which can be made from a variety of sources, including natural gas, coal and biomass, and turned into electricity, fuels and other chemical compounds.

Some companies are trying to produce ethanol using syngas made from renewable sources, such as wood chips, plants and trash. “Syngas is one of the most flexible and versatile feedstock from a wide range of materials – any organic matter can be gasified,” Burk said at the time. Genomatica subsequently raised a $45 million round from investors including Waste Management.

Genomatica filed to go public in August 2011, but it canceled that plan the following summer after raising a $41.5 million round and deciding that the market wasn’t going to be welcoming. The company had raised $84.2 million in venture capital since inception when it first filed to go public.