To begin with, GranBio has had the advantage of being tied to a powerful Brazilian family, the Gradins. But observers are quick to add that the key to GranBio’s quick rise has been partnerships, resources, and an eye to the bottom line.
Part of GranBio’s success was forming a strategic partnership with BetaRenewables, a joint U.S.– Italian venture. One reason GranBio has been able to start production so quickly, says former U.S. managing director Vonnie Estes, is that it is deploying technology rather than developing it. GranBio licensed an efficient process known as Proesa from Beta Renewables to free cellulose and hemicellulose from lignin and transform them with enzymes into simple sugars.
Cost-cutting is the key to Beta Renewables’ strategy, says Jim Lane of Biofuels Digest. “BetaRenewables is really known for being very aggressive on focusing on cost reduction and figuring out how to reduce the cost and the timescale of getting into a technology,” he says.
But that’s just part of it. “GranBio is really good at getting great people to work with them, getting great people to work together, and also to integrate the work of lots of companies around the world and bring them down into the Brazilian environment,” Lane says. “It’s a different country, it has different feedstocks, and it has different culture. Being able to translate that technical excellence into a local setting is much harder than it looks. Someone that is really good at translating a great technology into a locale—that’s a real material advantage. And getting lots and lots of excellent people to work with you -- it’s like getting a great basketball team together.”
That “great team” is actually older than GranBio itself. “The company is new but the people who work here had been working together for a very, very long time before Gran Bio,” says Alan Hiltner, GranBio’s executive vice-president. Bernardo Gradin is the president of GranBio, and his family had an ownership in Odebrecht Organization, a Brazilian conglomerate, and its subsidiary, Braskem, the largest petrochemical company in Latin America.
Many of the key players came from Braskem and elsewhere in the Odebrecht Organization. “Most of our people came from the chemical sector. They are used to the chemical markets,” says Hiltner. “They are used to operating in big-scale plants. They are used to making an alliance because Braskem had lots of alliances, lots of technology providers. And all of this experience was used here to construct our first plant, Bioflex 1.”
A key relationship exists between GranBio and GranEnergia, run by Gradin’s brother, Miguel. GranEnergia constructs deep-sea drilling devices for Petrobras to explore for oil. “So we use his expertise as well to construct the plant [Bioflex 1] very, very quickly. For a company that is used to constructing deep-sea drilling devices, constructing this plant is a piece of cake,” says Hiltner. “When you have a trust relationship with your team, things really move fast.”
The connections and financial resources of the Gradin family has helped GranBio avoid the lack of capital that has crippled so many other enterprises. The Brazilian bank BNDES, for example, loaned GranBio $149 million in 2012 through a subsidiary. Says Hiltner, “Our leader, Bernado Gradin, is a powerful man. He has the relationships, he has the money, he has the knowledge of the chemical sector. So it was rather easy to put everything together and within three years do all this.”
The culture of GranBio also entered into the equation, says Estes, who years before joining GranBio in 2013 managed DuPont’s cellulosic ethanol program. “When I worked for Dupont, we modeled the feedstock development for about two years before we did anything. GranBio just went out and tried stuff,” says Estes. “Dupont is going to move slowly because everything is Six Sigma and everything is planned out and figured out with a million engineers and checked and rechecked and rechecked and rechecked. They’re just going to be slow.”
“A really good partnership”
Located in northeastern Brazil, in the cane-growing state of Alagoas, Bioflex 1 is slated to produce about 22 million gallons of ethanol per year from 350,000 tons of dry mass. This biomass is primarily sugarcane straw (the tops and leaves), but also up to 20 percent bagasse (once burned as agricultural waste, bagasse consists of the fibers that remain after the cane stalks are crushed for sugar).
To feed itself, Granbio requires biomass from the equivalent of 124,000 acres, and it’s co-located with a first-generation sugarcane ethanol plant owned by Grupo Carlos Lyra. After the cane is cut, GranBio will be in the fields harvesting straw.
“Our feedstock train is right next to his bagasse pile,” says Estes. “It’s a really good partnership. He makes money; we make money.”
GranBio is located near a major port and uses a relatively inexpensive feedstock. Already, because of its equatorial location, GranBio pays only about $30 for a dry ton of sugarcane straw. In the United States, corn stover runs two to three times as much. Says Estes, “As we move into energy cane in the next couple of years, we think we will be able to get the feedstock cost down to $25 a ton.”
Granbio’s other main partners include Biochemtex, which provides engineering, equipment and technical assistance, and Chemtex (both subsidiaries of Italy’s Mossi Ghisolfi Group). Novozymes, a Danish enzyme provider, and DSM, the Dutch company that provides industrial yeasts, are also major partners.
Although policy changes to the Renewable Fuel Standard are an ongoing concern, the company still plans to export at least half of its fuel to the United States.