- Carbios has recently consolidated key partnerships with
Indorama Ventures and Novozymes, and has announced funding and
investment of over €150 million for the first PET biorecycling
plant in the world the cost of which has been re-estimated at €230
million1
- Carbios intends to capture 4 to 8% share of global r-PET market
by 2030 and 8 to 12% by 2035 while consolidating its science-based
leadership
- Carbios outlines new strong market opportunities and plans to
expand its innovation pipeline beyond PET and PLA for degradation
of other types of plastic such as polyamides and polyolefins
- Carbios provides details on its business model for 2030 and
2035
Regulatory News:
Carbios (Euronext Growth Paris: ALCRB), a biotech company
pioneer in the development and industrialization of biological
technologies to reinvent the life cycle of plastic and textiles,
will hold its 2023 Strategic Update today at 2pm CET in which it
provides details of its business model for 2030 and 2035. Carbios
announces its ambition to be a leading player in the global r-PET
market by capturing between 4 and 8% of market share by 2030 and
between 8 and 12% by 2035.
CLICK
HERE TO JOIN THE WEBCAST AT 2pm CET OR TO VIEW THE
REPLAY
Emmanuel Ladent – Chief Executive
Officer
and the Carbios Leadership
team
6 June 2023, from 2pm CET to 4pm
CET (Paris Time)
https://edge.media-server.com/mmc/p/u2qw4cir
France Dial-in: +33 170918704 /
UK Dial-in: +44 1 212818004
1. A VALUE-CREATING BUSINESS MODEL
Carbios’ business model, based on the licensing of its unique
PET biorecycling technology2, relies on a CapEx lean approach and 3
sources of revenue (upfront payments and two recurring revenues
streams detailed below). This business model will be applied to all
plants, including the first plant in Longlaville:
(i) the granting of licenses for the use of its know-how and
intellectual property: they will generate revenues in the form of
upfront payments paid by the licensee based on the installed
capacity for an amount ranging from €100 to €200 per ton;
(ii) royalties from the sale by Novozymes of Carbios
proprietary enzymes directly to manufacturers using Carbios’
technology. This revenue stream will result from a portion of
the margin realized by Novozymes (according to mutually exclusive
long-term partnership agreement) on the sale of the fully patented
Carbios enzyme to the licensee. This revenue stream will be
proportional to the volume of enzymes sold;
(iii) royalties from the premium generated by manufacturers
from the sale of biorecycled PET.
The two royalty streams (ii) and (iii) are estimated at around
€250 or more per ton of r-PET produced3.
In a dynamic global r-PET market, Carbios’ ambition is to
position itself as a world leader to capture 4 to 8% of this market
by 2030 and between 8 to 12% by 20354.
In its constant efforts to expand its innovation pipeline and
extend its proprietary technologies to other polymers, especially
polyamides and polyolefins, with first patents expected from 2023,
R&D and Industrial costs5 are expected to increase by 15 to 20%
on a yearly basis until 2035 and SG&A (Selling, General &
Administrative)6 expenses are expected to increase in the meantime
by 8 to 10%, mainly to support the Company’s licensing and
commercial efforts.
From a licensing standpoint, payback is expected to be below 7
years from start of investment for a 100kt plant and provide an
Internal Return Rate above 20%. The Company also expects its first
plant in Longlaville to be cash positive from operations within the
first year of commissioning, with commissioning due in 2025.
2. ADVANTAGES OF CARBIOS BIORECYCLING TECHNOLOGY
Carbios has defined 6 key advantages for its enzyme-based
biorecycling technology compared with current recycling
technologies:
Since PTA and MEG are used in more than 95% of existing PET
production plants, PET producers can easily switch to Carbios PTA
and MEG monomers derived from plastic waste as an alternative
feedstock to petro-sourced monomers. This differs from chemical
recycling, which produces DMT and MEG (or BHET) monomers which
represent less than 5% of global capacities7. Consequently,
Carbios’ technology seamlessly integrates into the vast majority of
existing PET manufacturing processes hence avoiding CapEx and
significant environmental impact.
Thanks to its highly selective enzyme used in the process,
Carbios PET biorecycling technology allows the processing of all
types of PET waste, including waste that is difficult or impossible
to recycle with current technologies (colored, opaque, multi-layer
packaging, industrial textile and consumer clothing). This allows
high flexibility in terms of feedstock mix, therefore maximizing
the local sourcing potential and decreasing the waste mix average
stock.
Carbios’ technology allows for circularity by industry, such as
fiber-to-fiber circularity, which avoids feedstock competition
between textile and packaging industries. Carbios’ technology can
transform low-quality feedstock into food-grade PET and produce
transparent and high-grade bottles regardless of packaging flakes
quality, therefore avoiding the downcycling of bottle waste into
fibers.
Compared to current recycling technologies which only allow few
cycles, Carbios PET biorecycling technology maximizes the number of
cycles while preserving quality. There is no degradation of r-PET
quality throughout cycles because Carbios’ technology returns to
the two monomer components (PTA and MEG), hence avoiding new oil
and gas use to produce PET. At demo scale, the overall recovery of
the process reaches 90% on plastic waste made of 100% PET content.
The overall recovery will vary depending on the amount of PET
content in the feedstock.
Carbios r-PET has the same mechanical and technical properties
as virgin PET, including high food-grade quality. This means that
Carbios r-PET is suitable for any PET applications. Bisphenol-A
free and issued from a hydrolysis process, Carbios r-PET ensures
consumer’s health security.
- -51% CO2 emissions vs one cycle of virgin PET
production8
Carbios’ technology uses a soft process: it does not require
organic solvents and the low temperatures during depolymerization,
among other factors, result in a 51% reduction in CO2 emissions
compared to the production of virgin PET (taking into account a
conservative hypothesis of diversion of 50% PET waste from a
conventional end-of-life).
3. LICENSING STRATEGY UNVEILED
The industrial demonstration plant, installed in
Clermont-Ferrand in September 2021, has been fully operational
since July 2022. The process documents required for the first
industrial plant, and the Technical Information Summary needed for
international prospection to license Carbios’ PET biorecycling
technology, were finalized in April 2023. This step marked the
start of Carbios’ licensing strategy global implementation.
The standard timeline for licensing is divided into two parts:
prospects technology promotion (lasts approximately 12 to 18
months), and after the license has been granted until plant
start-up (lasts approximately 36 months). Different fees are
generated at different stages of the timeline, with the first
license fee received upfront upon signature of the licensing
contract. At this stage, engineering documentation including the
Process Design Package and Process Book are delivered for the
design and construction of licensed plants and to allow the
transfer of Carbios PET biorecycling technology to license holders.
Other fees will be received up to commissioning and beyond (for
additional services such as training, engineering consulting,
assistance for start-up).
- Multiple industries interested in Carbios’
technology
PET producers and chemical companies are natural potential
customers for a technology that allows a true circularity for PET
with alternative feedstock to petro-sourced monomers, and that is
fully compatible with existing polymerization plants. By providing
value to all possible sources of PET feedstock including complex
plastic packaging and textile waste, Carbios also aims to reach out
to other players in the value chain such as waste management
companies and public entities. Carbios’ technology also provides a
solution to brand owners in order to meet growing regulatory
requirements as well as their own ambitious sustainability
objectives for the inclusion of r-PET in their products and
packaging. Public entities municipalities, impact and
infrastructure funds as well as sovereign funds could also be
interested in investment opportunities.
Depending on the targeted prospects, Carbios intends to adapt
its portfolio of plant capacities operated under license with
varying sizes: small plants around 20ktpa unit for specialty
polymer players, medium plants at 50ktpa for regional partnerships,
and large plants at 200ktpa for main production hubs.
Carbios is targeting three regions for its licensing
prospection: EMEA, North America and South-East Asia.
4. R-PET MARKET
- Advanced r-PET market forecast
Carbios presents today its mid-term vision for the r-PET market
forecast, and it is confident to take the lion’s share of the
advanced r-PET market, predicting +/- 38% market share of advanced
r-PET by 2050, equivalent to 23% of the total r-PET market.
In a booming global r-PET market, where market growth is
expected to almost double in 25 years from 101mt in 2025 to 186mt
by 20509, r-PET could represent 50% of the total PET market by 2050
(according to Carbios’ estimates taking into consideration improved
textile collecting and sorting, use of textile feedstock and
advanced recycling scale-up). Within the r-PET market, advanced
r-PET is the fastest growing segment with annual growth expected to
be more than 17% (vs total r-PET market growth of 8,4%)10. By 2050,
advanced recycling could represent 56mt, equivalent to more than
200€ billion market value.
Carbios predicts that growth in mechanical r-PET will be
constrained by limited availability of feedstock able to be
processed by this technology. Virgin PET will also be limited due
to lower demand for petro-sourced materials led both by brands’
sustainability ambitions and governmental regulations
worldwide.
- Consumer behavior and cost impact
Consumers are also pushing brands, and eco-friendly packaging is
an increasingly important factor guiding consumer purchasing
decisions. Consumers are willing to pay more for such packaging,
and Carbios estimates that the impact of including advanced r-PET
will be insignificant on consumer purchasing power, ranging from a
few cents for a bottle of water to less than 1€ for a 100%
polyester fleece jacket.11
5. FIRST INDUSTRIAL PLANT TO START CONSTRUCTION IN
2023
- Joint Venture with Indorama Ventures
Carbios and Indorama Ventures recently jointly announced the
signing of a non-binding Memorandum of Understanding ("MOU")12 to
form a Joint Venture for the construction of the world’s first PET
biorecycling plant. This plant will be built in the Grand-Est
Region of France. The Joint Venture equity will be split 75%
Carbios and 25% Indorama Ventures. The main objectives of the
industrial plant will be to generate revenue from industrial and
commercial activities, deliver first tons to partnering Brand
Owners and other market players, and train future licensees at
large scale. Indorama Ventures confirms intention to potentially
expand the technology to other PET sites for future developments.
The business model for this plant will be identical to Carbios'
licensing model (see section 1 above).
- Construction timeline on schedule
The construction timeline is on schedule with planning
permission filed in December 2022, start of construction,
recruitment and training of plant staff planned for end of 2023,
and commissioning of the plant due in 2025.
The plant is designed to maximize circularity with high product
quality, energy and waste minimization and improvement add-ons such
as increasing textile feedstock, the reuse and recycling of process
water.
Carbios secured an initial source of supply for its future plant
by winning part of the CITEO tender for the biorecycling of
multilayer trays. The consortium consisting of Carbios, Wellman (a
subsidiary of Indorama Ventures) and Valorplast has been selected
for 30% of the tonnages proposed by CITEO. The part of the stream
consisting of multilayer food trays will be handled by Carbios
starting from 2025 at its plant in Longlaville.
Carbios is in discussions with other players to secure the
yearly 50kt of waste expected for the plant’s full capacity.
Carbios estimates that the feedstock potential for the Longlaville
plant could reach 400kt in 2023 and is expected to increase to
500kt in 2030 due to higher rates of selective collection.
The overall sourcing strategy for Carbios is to minimize the use
of bottles as this is an expensive feedstock, and to diversify the
mix to include food trays, fines and textile waste for increased
competitiveness.
- Total capital expenditure re-estimated at €230
million
The total capital expenditure for the new plant has been
re-estimated at €230 million, versus initial estimation at 200M€,
considering recent impact from inflation. This increase reflects
the macroeconomic situation and the effects of inflation impacting
the industry as a whole but remains competitive with a much lower
CapEx per ton compared to other advanced recycling projects
announced in France. Moreover, Carbios believes that future sites
could benefit from potential CapEx optimization.
Based on and subject to the comprehensive terms set out in the
MOU, Indorama Ventures plans to mobilize about €110 million for the
Joint Venture in equity and non-convertible loan financing13,
pending final engineering documentation and final economic
feasibility studies.
Furthermore, Carbios has been selected for €42.5 million in
funding from the French State via France 2030 (€30 million of the
total amount) and the Grand-Est Region (the remaining €12.5
million). The implementation of this funding is conditional the
European Commission’s approval of the corresponding state aid
scheme, followed by the conclusion of national aid agreements.
Longlaville project costs shall be financed for €152,5 million
(i.e 65%) by the sums mobilized by Indorama Ventures and the French
State and Grand-Est Region aids available for the project. The
remaining amount shall be financed by equity capitalization of the
Joint Venture by Carbios. Part of Carbios’ equity injection into
the Joint Venture shall be financed by a portion of Carbios’
current cash position (i.e. €86 million as of 30 April 2023).
- Potential Equity Financing
Carbios is also actively examining the best options to finance
its remaining equity injection into the Joint Venture and will
choose the most appropriate solution and timeline based on market
conditions. In the event of any decision to use equity financing,
the Company’s shareholders will be given priority.
6. ENZYME PERFORMANCE UPDATE
Since the publication of an article in Nature in 2020, Carbios
has continued to optimize and improve its enzyme performance,
notably to be more thermostable and more active. The final
conversion reached at depolymerization phase is 98% to date (versus
93% published in Nature), which represents an increase in
production of 5%.
At 98%, Carbios’ enzyme continues to largely outperform
published academic ones.
This proprietary enzyme will be used in 2025 in the first
industrial plant, and Novozymes will optimize the micro-organism
that produces the enzyme for full-scale enzyme production during
the second half of 2023.
To pursue its research into the optimization and continuous
improvement of its enzymatic technology, Carbios has recently been
granted total funding of €11.4 million by the French government as
part of France 2030, including €8.2 million directly for Carbios
(o/w €5 million in the form of a repayable advance) and €3.2
million with its academic partners INRAE14 , INSA15 and CNRS16 via
the TWB17 joint service and TBI18 research units.
The total of French aids in 2023 is 54 million euros, following
the 30 million euros loan obtained in 2022 from the European Bank
of Investment.
7. FIRST SALES OF PLA BIODEGRADATION SOLUTION EXPECTED BY
2024
The PLA market is expected to grow with global production
increasing from 400kt in 2022 to 700kt in 2026. Carbios plans to
make its first sales in the US at the end 2023 or beginning of
2024.
Food Contact Notification is in the final stages with approval
from the US Food and Drug Administration (FDA) before end of 2023
and will enable commercial roll-out of this proprietary technology.
Approval from the European Food Safety Authority (EFSA) will
follow.
8. PIPELINE EXPANSION TO OTHER PLASTICS
Carbios' mission is to bring all types of plastics into the
circular economy. Carbios recently published an article entitled
"Enzymes' power for plastics degradation" in Chemical Reviews, one
of the 10 most influential scientific journals in the world, in
collaboration with its academic partners Toulouse Biotechnology
Institute (TBI19) and the University of Bordeaux. This article
marks a turning point for Carbios in the search for enzymes to
degrade plastics other than PET and PLA.
With its strong R&D infrastructure and established
partnerships, Carbios can develop its portfolio of innovations on
different types of plastic more rapidly. Future polymers of
interest, such as polyamides (including nylon) or polyolefins
(polyethylene/polypropylene), will benefit from this acceleration
of the R&D phase. These types of plastic will open up to other
markets, such as, for polyamides, automotive and electronics
markets, and a growing global market estimated to be 30 billion
dollars with currently very few recycling technologies
available.
- Protection of innovations
From 2023, one of the key focus areas for the Intellectual
Property team will be to protect innovation related to enzymatic
degradation of other polymers and ensure that Carbios stays ahead
of the game. Carbios’ proactive policy with regards to IP ensures
that innovations are protected all along their lifetime.
About Carbios:
Carbios is a biotech company developing and industrializing
biological solutions to reinvent the life cycle of plastic and
textiles. Inspired by nature, Carbios develops enzyme-based
processes to break down plastic with a mission to avoid plastic and
textile pollution, and accelerate the transition to a circular
economy. Its two disruptive technologies for the biorecycling of
PET and the biodegradation of PLA are reaching industrial and
commercial scale. Its biorecycling demonstration plant has been
operational since 2021 and a firstindustrial plant, in partnership
with Indorama Ventures, is due to be commissioned in 2025. Carbios
has received scientific recognition, notably with the cover of
Nature, and is supported by prestigious brands in the cosmetics,
Food & Beverage and apparel industries to enhance their
products’ recyclability and circularity. Nestlé Waters, PepsiCo and
Suntory Beverage & Food Europe are members of a packaging
consortium founded by Carbios and L’Oréal. On, Patagonia, PUMA, PVH
Corp. and Salomon collaborate with Carbios in a textile
consortium.
Visit www.carbios.com/en to find out more about biotechnology
powering plastic and textile circularity.
Twitter: Carbios / LinkedIn: Carbios / Instagram:
insidecarbios
Information on Carbios shares:
ISIN Code FR0011648716 Ticker Code Euronext
Growth: ALCRB LEI: 969500M2RCIWO4NO5F08
Carbios, founded in 2011 by Truffle Capital, is eligible for the
PEA-PME, a government program allowing French residents investing
in SMEs to benefit from income tax rebates.
Disclaimer on forward-looking statements and risk
factors:
This press release contains forward-looking statements, not
historical data, and should not be construed as a guarantee that
the facts and data stated will occur. These forward-looking
statements are based on data, assumptions and estimates considered
reasonable by Carbios. Carbios operates in a competitive and
rapidly evolving environment. It is therefore not in a position to
anticipate all risks, uncertainties or other factors that may
affect its business, their potential impact on its business or the
extent to which the materialization of a risk or combination of
risks could lead to results that differ significantly from those
mentioned in any forward-looking statement. Carbios draws your
attention to the fact that forward-looking statements are in no way
a guarantee of its future performance and that its actual financial
position, results and cash flows and the development of the sector
in which Carbios operates may differ significantly from those
proposed or suggested by the forward-looking statements contained
in this document. In addition, even if Carbios’ financial position,
results, cash flows and developments in the industry in which it
operates are consistent with the forward-looking information
contained in this document, such results or developments may not be
a reliable indication of Carbios’ future results or developments.
Readers are advised to carefully consider the risk factors
described in the Universal registration document filed with the
French Market Authority (“AMF”), as well as in the half-year
financial report available free of charge on the Company’s website.
Should all or any part of these risk factors materialize or others,
in no case whatsoever will Carbios be liable to anyone for any
decision made or action taken in conjunction with the information
and/or statements in this press release or for any related damages.
This information is given only as of the date of this press
release. Carbios makes no commitment to publish updates to this
information or on the assumptions on which it is based, except in
accordance with any legal or regulatory obligation applicable to
it.
This press release and the information contained herein do not
constitute an offer to sell or a solicitation of an offer to buy or
subscribe to shares in Carbios in any country.
_________________________
1 Indorama Ventures plans to mobilize
about €110 million for the Joint Venture in equity and
non-convertible loan financing, pending final engineering
documentation and final economic feasibility studies. The remaining
amount will be financed by Carbios.
2 Carbios PET biorecycling technology
converts any type of PET waste into its basic building blocks
(monomers: PTA and MEG). These can then be used to manufacture PET
that is 100% recycled and 100% recyclable, with no loss of
quality
3 The core target for potential licensees
for Carbios PET biorecycling technology are PET producers using PTA
and MEG as feedstock to operate their plants. Other potential
licensees will subcontract capacities offtakes or acquire the
necessary equipment if they want to produce PET.
4 Global size of the market based on
McKinsey & Company “Accelerating Momentum” scenario, 2023
5 In 2022, €13 million net
6 In 2022, €13 million
7 The core target for potential licensees
for Carbios PET biorecycling technology are PET producers using PTA
and MEG as feedstock to operate their plants. Other potential
licensees will subcontract capacities offtakes or acquire the
necessary equipment if they want to produce PET
8 Deloitte was the expert in charge of
this Life Cycle Assessment
9 Base case outlook based on McKinsey
& Company “Accelerating Momentum” scenario, 2023
10 According to Carbios estimates
11 Based on (i) CARBIOS Quantitative
research in partnership with Strategic Research (May 2022 N=6038.
USA, FR, GE, IT, UK, JP); (ii) CARBIOS Qualitative research in
partnership with Spring Voice research Institute (July 2022. USA);
(iii) Business of sustainability index, PDI sustainable solutions
(June 2022 N=1062 adults, USA)
12 Contract documentation to be finalized
before end of 2023
13 Both equity and non-convertible loan
financing by Indorama Ventures shall only be made in the Joint
Venture and not in Carbios
14 French National Research Institute for
Agriculture, Food and the Environment
15 French National Institute of Applied
Sciences
16 French National Center for Scientific
Research
17 Toulouse White Biotechnology - UMS
INRAE 1337 / UAR CNRS 3582
18 Toulouse Biotechnology Institute - UMR
INSA/CNRS 5504 / UMR INSA/INRAE 792
19 Toulouse Biotechnology Institute, joint
research unit associating INSA of Toulouse, CNRS and INRAE
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230605005878/en/
CARBIOS Melissa Flauraud Press Relations
melissa.flauraud@carbios.com +33 (0)6 30 26 50 04 Benjamin
Audebert Investor Relations contact@carbios.com +33 (0)4 73 86
51 76
Press Relations (France) Iconic Marie-Virginie
Klein mvk@iconic-conseil.com +33 (0)1 44 14 99 96
Press Relations (U.S.) Rooney Partners Kate L.
Barrette kbarrette@rooneyco.com +1 212 223 0561
Press Relations (DACH & UK) MC Services Anne
Hennecke carbios@mc-services.eu +49 (0)211 529 252 22
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