Eastman Business Park's Mike Alt was in San Diego this week meeting with executives and investors from the biofuels and renewable chemicals industries at the 9th annual BIO Pacific Rim Summit. The three-day event hosted by the Biotechnology Industry Organization (BIO) focused on the future direction of the industrial biotechnology and bioenergy sectors in North America and the Asia-Pacific region, and drew participants from as far away as China, Japan, Australia, India, and Thailand.
Coinciding with the conference came word from the New York State Governor's office that the State plans to provide an additional $2 million supplement to the $3 million in state economic development funds already committed for the construction of the EBP Biomaterials Advanced Manufacturing Center. That announcement alone drew significant interest among the summit delegates. Here's why.
Looking at the biotech industry across the country, the BIO trade group has projected that U.S.-based jobs for the bio-renewables sector will rise from approximately 40,000 in 2011 – which represents 3 to 4 percent of all chemical sales – to more than 237,000 by 2025. This employment level would represent approximately 20 percent of total chemical sales.
In addition, by 2017, a government-based Renewable Chemicals Market Assessment predicts a potential value add of $775 million per year for renewable chemicals, with a capital investment of $2.4 billion. By 2022, the value added potential is estimated to rise to $3 billion per year with $6 billion capital.
“There was a very strong mix of mid-stage and late stage companies present at the summit," Mike Alt said. “Most presentations focused on acquiring the revenue needed to build that demonstration project or first commercial plant."
Alt said there were several major takeaways from the conference:
- Funding of biotechnology projects is very competitive and very difficult to come by. It is important for innovators to show a strong plan and commitment to execute.
- Large companies with a huge interest in the future of biofuels and renewable energy are now the bigger players in the biotechnology sector. They are providing more of the investment capital for projects vs. venture caps and private equity firms.
- Most companies do not have the talent within their organization to execute the manufacturing construction phase and start-up. They need more engineers and fewer biologists/chemists. The successful companies will focus on and dedicate up to a third of their resources during the commercialization phase.
- Construction and start-up will take 6-12 months longer than popular opinion. The recommendations from the experts: plan the work well and work the plan well, with diligence, speed and with as little capital as required.
- Do not start any demonstration, pioneer or commercial plant until all the development work is complete. The sure path to failure is thinking the bugs can be worked out while the plant is being built.
“All of these observations fit very well within the sweet spot we have created for EBP, and our efforts to create an integrated biotechnology ecosystem," Alt said. “Several companies expressed a great deal of interest in what we are doing and how we are proceeding – with speed, the right expertise, with due diligence and limited capital."
Alt said EBP's initiative did not fall on deaf ears with officials of the U.S. Department of Energy either: “They were impressed. They were most impressed about our plans to create the Bioscience Technology and Manufacturing Center at EBP, using the shared infrastructure, assets and engineering talent that already exists here."
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