Versalis Forms Partnership with Genomatica & Novamont to Produce Butadiene from Biomass

MILAN, Italy -- Versalis, Enis chemicals subsidiary leader in the production of elastomers, together with Genomatica (one of the leading developer of process technology for renewable chemicals) and Novamont (one of the leader in biodegradable plastics and pioneer in third generation integrated biorefineries) signed a Memorandum of Understanding (MOU) to establish a strategic partnership to enable production of butadiene from renewable feedstocks.

Butadiene is a raw material used in the production of rubber for tires, electrical appliances, footwear, plastics, asphalt modifiers, additives for lubricating oil, pipes, building components, and latex.

The partnership, on the basis of which a joint venture will be established, will develop a comprehensive end-to-end process for production of polymer-grade butadiene from biomass. Versalis will hold a majority interest in the joint venture holding company and aims to be the first to build commercial plants using the process technology upon project success.

This unique and important agreement brings together the core competencies of all three companies. The partnership will leverage Genomaticas proprietary technologies and intellectual property for producing butadiene, Versalis extensive expertise in catalysis process development and process engineering scale-up and market applications of butadiene derivatives, as well as Novamonts experience in renewable feedstocks.

Under this agreement, Versalis will use Genomaticas process technology for economically competitive and sustainable production of an important supply-constrained chemical. The process technology aspect of the agreement is intended to be made available for future licensing in Europe, Africa and Asia.

Butadiene is a key intermediate for Versalis elastomers business. The raw material required to produce it, extracted from C4s (a mixture of molecules containing four carbon atoms) and produced by cracking plants, is increasingly subject to availability problems.

Decreasing supplies and a lack of dedicated butadiene production facilities have resulted in significant long-term pressure on the price and volatility of the chemical, which in turn increases the price of butadiene-based products, including tires. Concerns of scarcity in the butadiene market are compounded by growth forecasts within the BRIC countries where demand for automotive products made from butadiene, such as tires, is expected to increase.

In this context, butadiene supplies from biomass become strategic to Versalis, because in times of C4 stream scarcity it can be freed from naphtha cracking processes. So the partnership represents a valuable opportunity to boost the supply of butadiene with the support of its know-how and the industrial system, and to expand its bio-based portfolio.

"Genomaticas process technology for on-purpose butadiene combined with our experience in downstream applications and our ability to rapidly scale and commercialize the process can expand our industrys approach to C4 production, seizing a promising business opportunity in a market that is experiencing a critical time" said Daniele Ferrari, CEO of Versalis. "This partnership, which follows the establishment of Matr矛ca, the equal joint venture with Novamont for the production of monomers, intermediates and polymers from renewable sources, accelerates the entry of Versalis in that business by strengthening its leadership in elastomers, in line with the new strategy of focusing on products with high-added value."

"Together we will have a great opportunity to apply Novamonts concept of third generation integrated biorefineries to a well-known chemical like butadiene, applying new biotechnological and chemical processes to local biomass for an innovative industry at local level, thereby improving environmental, economical and social sustainability," said Catia Bastioli, CEO, Novamont. "And the ability for on-purpose production will make it easier to adjust supply to meet local market demand while staying close to a low volatility feedstock and reducing environmental footprint."

"Versalis and Novamont are ideal partners to join us in leading the development of process technology for the production of butadiene from renewable feedstocks," said Christophe Schilling, Ph.D., CEO of Genomatica. "Together we can cover the entire value chain, and drive from innovation to commercialization, providing a comprehensive solution. This partnership is further validation of the ability of Genomaticas technology platform to address multiple chemical market opportunities."

The agreement between the three parties builds upon a series of recent key events including the June 2011 formation of Matr矛ca, a 50:50 joint venture in bio-based chemicals production between Versalis and Novamont; the announcement that Versalis plans to heavily invest in innovation and capitalize on Elastomers, and Genomaticas successful production of pound quantities of bio-based butadiene in August 2011.

About Genomatica

Genomatica is one of the technology leader for the chemical industry. The company delivers new, transformative manufacturing processes that enable its partners to produce intermediate and basic chemicals from renewable feedstocks. These chemicals serve as the basis for making substantially all of the products that make modern life possible, and its processes enable the production of the exact same intermediate and basic chemicals that are at the core of the chemical industry. The company expects its processes will deliver better economics with enhanced sustainability and a smaller environmental footprint than conventional petroleum-based manufacturing processes.

About Novamont

Novamont is a company that was created by a group of researchers following the example of Giacomo Fauser. The companys ambitious project, "Living Chemistry for Quality of Life", combines chemistry, agriculture and the environment.

About Versalis

Polimeri Europa, the primary Italian chemical company, and one of the foremost in Europe, changed its name to Versalis. The new name represents a tangible sign of Enis 2011 decision to relaunch this sector of its business. Versalis, a name with an international dimension, one that is strongly suggestive and laden with references to company values, expresses fully the elements of radical change and renewal contained in polimeri europas 2012-2015 Strategic Plan.