France-headed biotechnology developer Global Bioenergies has announced that the signature of thirteen Letters of Intent (LoI) from undisclosed French and international industrial leaders for purchases totalling 49 000 to 64 000 tonnes of isobutene and derivatives annually. This covers the total production capacity of the planned IBN-One plant, a joint venture with Cristal Union, the fourth largest sugar producer in Europe.
Cristal Union continues to advance the project of building the first isobutene production unit in IBN-One as a way to open up new market opportunities. The execution of the letters of intent is a very important step. The sustained improvement in process performances by Global Bioenergies remains a key success factor for the project, said Xavier Astolfi, Deputy CEO of Cristal Union.
According to a statement, the Letters of Intent (LoI) come from the cosmetics, speciality fuels, road fuels and air transport industries. Over half of the LoI’s and a significant share, about 20 percent, of the planned annual production capacity are earmarked for high added-value niche markets in speciality fuels and cosmetics.
Demand from the cosmetics industry is rising significantly. This surge in interest stems from a paradigm shift in cosmetics: renewable isobutene derivatives are actively sought after because they can substitute for ingredients belonging to the silicone family, being phased out. We estimate the global market for isobutene derivatives in tens of thousands of tonnes per year, just for cosmetics. A large share of IBN-One’s capacity could serve this market and make the plant highly profitable, commented Marc Delcourt, CEO of Global Bioenergies
Several of the LoI’s include price indications that confirm the potential for isobutene derivatives to fetch prices far higher than their oil-derived counterparts.
The internal return rate (IRR*) is around 18 percent in our base case scenario, well above average for industrial projects. This IRR would be even higher under optimistic scenarios, with greater demand from high-premium market segments. The investment bank Vulcain is assisting IBN-One in putting together the financing package and identifying financial partners for the project, said Bernard Chaud, CEO of IBN-One.