Iogen focuses on cellulosics as Novozymes buys enzyme business

By Susanne Retka Schill | January 31, 2013

The phones were ringing and multiple staff meetings were being held at the Iogen Corp. headquarters following the Jan. 31 announcement of Novozymes’ acquisition of the industrial enzymes business of the Ottawa-based enzyme maker.

“Iogen Corp. ran a successful enzyme business and we’re really proud that Novozymes was interested in us,” said Brian Foody, Iogen CEO. Novozymes has purchased Iogen Bio-Products, the industrial enzyme segment of Iogen Corp. “We have a solidly profitable business here in Ottawa. Our expectation is that Novozymes will be taking on all our employees in Ottawa and there are no expectations of downsizing.”

Iogen Bio-Products includes several lines of enzymes used in the textiles and feed manufacturing. It also has a line of enzymes used in wheat-based ethanol production and a line used in grain processing, although the lines did not include amylases, Foody said. Novozymes is also getting a license for Iogen’s second-generation enzymes developed for cellulosic ethanol production. The financial deal is scheduled to close Feb. 21.

Iogen Corp. will continue in business with about 50 employees and will continue to operate the demonstration cellulosic ethanol facility in Ottawa as Novozymes takes over operations of the enzyme production segment at the same location, Foody said.

“Our focus at Iogen Corp. will be on our cellulosic venture with Raizen,” Foody explained. Iogen has been running sugarcane bagasse through its demonstration facility for the past year, he added. “We expect to begin some big runs using bagasse in the months ahead.” The demonstration facility has been used for refining Iogen’s multi-stage enzymatic hydrolysis process which uses a modified steam explosion pretreatment and its proprietary cellulase enzymes. According to a description on Iogen’s website, the process uses advanced microorganisms and fermentation systems that convert both C5 and C6 sugars into ethanol. The system includes heat integration, water recycling and coproduct production.

Raizen Group and Iogen announced in October  that engineering had begun on the first commercial-scale facility using Iogen technology. Foody declined to say how soon groundbreaking will occur, although he did add, “It is well along in the planning process.”  Raízen Energia SA is the production company of Raízen Group, a $12 billion joint venture between Shell and Brazilian ethanol company Cosan SA. Raízen produces 2.2 billion liters of ethanol annually, 4 million tons of sugar, and has installed capacity of 900 MW of electric energy derived from sugarcane bagasse.

Iogen has gone through major changes in the past year since Royal Dutch Shell ended its support of research and development in the joint venture, Iogen Energy. The joint venture announced layoffs and the cancellation of plans to pursue a commercial-size cellulosic ethanol project in Canada, refocusing its efforts on the Brazilian developments.