05-Oct-2011 - Evonik Industries AG

Evonik establishes joint venture in Russia to produce feed amino acid L-lysine

Growing demand for biotechnology-manufactured L-lysine in Russia

Evonik Industries and Russian company RusBiotech International have established the joint venture Russkie Biotechnologii for manufacturing L-lysine in Russia by means of a biotechnological process. Vassily Golubev, governor of the Rostov-on-Don region, and Vadim Varshavsky, a deputy of the State Duma of the Russian Federation, supported the formation of the joint venture. The purpose of this joint venture, in which Evonik holds a minority shareholding with an option to increase its share significantly, is to produce the feed amino acid L-lysine in Russia.

L-lysine is an amino acid for animal feed that Evonik markets under the brand name Biolys®. The partner companies are planning to build a plant for Biolys® production using the wheat grown in the Rostov region. The total investment of the joint venture will come to around €150 million. The joint venture has already begun with the engineering. The plant is slated to go on line in 2014 and convert approximately 300,000 metric tons of wheat into Biolys® each year.

The joint venture will be based in Volgodonsk in Russia’s Rostov region and concentrate on the Russian market. In March 2011, the partners signed a letter of intent to this effect. Evonik and RusBiotech International are also in talks with state-owned Rusnano on Rusnano’s possible acquisition of a stake in the joint venture.

“Russia is an important market for us, a country in which demand for biotechnology-manufactured amino acids is growing,” said Patrik Wohlhauser, the Evonik Executive Board member responsible for the Consumer, Health & Nutrition segment. “Getting involved locally with a production facility will allow us to strengthen and expand our market position for L-lysine.”

One of the factors in favor of Russia as a location is the secure supply of the raw material wheat, which the joint venture itself will process for Biolys® production. “In this way, we’re integrating backwards and getting deeper into the value chain,” explained Dr. Walter Pfefferle, head of the Bioproducts Business Line with responsibility for Evonik’s L-lysine business.

The new facility will be operated using the fermentation technology developed by Evonik, which the company has continuously optimized in recent years in terms of efficiency as well as raw material and energy consumption.

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