Sime Darby to buy 30% stake in Verdezyne

by **Cals** Tue 29 Apr 2014, 22:11

Business & Markets 2014

Written by Shalini Kumar of theedgemalaysia.com

Tuesday, 29 April 2014 10:35

KUALA LUMPUR: Sime Darby Bhd is taking a 30% stake worth US$30 million (RM97.92 million) in US-based industrial biotechnology company, Verdezyne Inc, which will avail the Malaysian company with RM37 billion worth of the latter’s current products targeted for commercialisation.

Sime Darby said laboratory, pilot and demonstration- scale validation of Verdezyne products have already been carried out, with the results so far attracting favourable interest from the market.

The Malaysian company and Verdezyne yesterday signed a memorandum of understanding (MoU) for the stake acquisition, witnessed by US President Barack Obama and Prime Minister Datuk Seri Najib Razak.

Sime Darby was represented by its president and group chief executive, Tan Sri Mohd Bakke Salleh, and Verdezyne by its president and chief executive officer Dr E William Radany.

Sime Darby said in a Bursa Malaysia announcement that its new unit, Sime Darby Renewables, will spearhead an initiative with Verdezyne to essentially focus on converting traditional and non-traditional palm-based commodities into products of higher value. California-based Verdezyne has proprietary technologies to competitively produce chemicals derived from sustainable materials, which can be found in the oil palm value chain.

These chemicals are used to make everyday items like clothing, footwear and adhesives, as well as industrial products such as automobile parts. Currently, these chemicals are mainly derived from petroleum-based feedstocks such as benzene and butadiene.

“Sime Darby plans to emerge as the single largest investor in Verdezyne, together with existing investors BP Alternative Energy; Royal DSM, a global life sciences group; OVP Venture Partners; and Monitor Ventures, subject to definitive documentation.

“Verdezyne has healthy financial prospects and the company secured a strategic commercial relationship with Universal Fiber Systems, LLC to supply its bio-based adipic acid for certain exclusive fields of use.

“Universal Fiber Systems is a global multi-polymer fiber producer, and markets its yarn systems globally with operations in North America, Europe and Asia,” Sime Darby said.

Verdezyne began operations in 2005 and has chosen Malaysia as its manufacturing hub. Its first own commercial plant, with an annual capacity in excess of 13,000 tonnes, is expected to generate approximately 140 knowledge workers in the fields of research and development and engineering.

“Over the past year, with the assistance of the Malaysian Biotechnology Corp, Verdezyne’s management team researched the oil palm industry extensively. We believe that Sime Darby, with its commitment to sustainability, is the perfect partner to help lead the revolution in renewable products in the US, Malaysia and beyond,” said Radany.

This article first appeared in The Edge Financial Daily, on April 29, 2014.