Shengquan invests $100 million in cellulosic ethanol

June 15, 2012, Copenhagen, Denmark – When China’s Shengquan Group starts producing cellulosic ethanol next month, it will be the first in the world to do so on a commercial scale. More than that, the production will also be cost-competitive given that the feedstock, conventional ethanol, is a waste product from Shengquan’s current production.

Shengquan is investing $100 million in the new groundbreaking facility. Danish company Novozymes, the world leader in bioinnovation, will supply the enabling enzyme technology. The two companies first announced their plans in April this year and will sign the final agreement Friday during Hu Jintao’s visit to Denmark.

“When Shengquan opens its facility next month, it will be the first in the world," explains Steen Riisgaard, President and CEO of Novozymes. "It's fantastic to finally see this industry go commercial; for more than 10 years our researchers have worked to bring down the cost of producing ethanol from agricultural residues and household and industrial waste.”

Shengquan is a leading producer of furfural for resin production in the foundry industry. Furfural is produced from corncob xylose, with the cellulose from the corncob left behind as a waste product. Using Novozymes’ enzymes, Shengquan will now be able to convert the cellulose into higher-value sugars that can be fermented to ethanol. Shengquan will market the ethanol as an industrial solvent.

“In order to continue to grow our country’s economy at the same time as reducing our dependency on natural resources and minimizing the environmental impact, we need to start thinking of waste as an extremely valuable resource,” comments Yi Lin Tang, President and Chairman of Shengquan Group. “Basically, we want and need to nurture a green and circular bioeconomy which is less dependent on fossil resources.”
 
Green ambitions in China

The two companies will sign the deal during Hu Jintao’s visit to Denmark, in the presence of His Royal Highness Crown Prince Frederik of Denmark, Wang Qishan, Vice-Premier of the People’s Republic of China, and Margrethe Vestager, Minister for Economic Affairs and the Interior, Denmark.

“As a company working in the clean tech space, we're thrilled by this important visit,” adds Steen Riisgaard. “China leads the world when it comes to investments in green energy and biochemicals, and the country’s long-term goals to improve its energy efficiency by 20% are among the most ambitious. This is a perfect match for Novozymes, because our biotechnology solutions make it possible to produce more with fewer resources and with less impact on the environment.”

Made in Shandong

Shengquan Group is based in the city of Jinan in Shandong province, where Novozymes opened its new innovation and business center only last week. Novozymes is one of the largest Danish investors in China, with a total investment of more than $500 million since 1994. In 1997, Novozymes became the first company globally to initiate biotech R&D in China. Today, the company has four production facilities in China, more than 1,100 employees and plans to invest further in the country in the coming years.
In China, Novozymes has also entered into partnerships with companies including COFCO and Sinopec to develop advanced biofuels and with Dacheng to develop bioglycol. According to Bloomberg New Energy Finance, China could easily replace almost 40% of its annual gasoline consumption with advanced biofuels by 2030. This would cut CO2 emissions significantly and create almost 3 million jobs in rural areas. With a domestic engineering, construction and feedstock market worth $118 billion, Chinese players would be the major beneficiaries.

About Novozymes

Novozymes is the world leader in bioinnovation. Together with customers across a broad array of industries, we create tomorrow’s industrial biosolutions, improving our customers' business and the use of our planet's resources. With over 700 products used in 130 countries, Novozymes’ bioinnovations improve industrial performance and safeguard the world’s resources by offering superior and sustainable solutions for tomorrow’s ever-changing marketplace. Read more at www.novozymes.com.