PARIS, June 27 (Reuters) - French oilseed group Avril announced on Monday a joint venture to invest 72 million euros ($79 million) in producing a resin ingredient from rapeseed that it says will let the wood panel industry make savings on traditional chemicals.
The joint venture with Israeli start-up Biopolymer Technologies and state investment bank BPI France is the latest effort by Avril to find new markets for oilseed crops produced by the French farmers that control the group.
The group has annual sales of about 6 billion euros, partly through production of biodiesel using rapeseed oil.
The new venture plans to launch a pilot this year after doing tests with wood panel firms, before progressively building up industrial capacity with the aim of producing around 50,000 tonnes per year of the biosourced chemical by 2020-2022.
The innovation uses rapeseed meal - a protein-rich biomass produced when oil is extracted from rapeseed - to create an additive that reduces by 20-30 percent the amount of resin needed in wood panels, executives said at a press presentation.
The potential savings in resin use, which represent 50-60 percent of the cost of making wood panels, means the new product has a cost advantage missing from other so-called green chemicals developed to replace petrochemicals, they said.
“It’s very, very rare to enter a green chemical market with a clear economic argument,” Avril’s Deputy Director General Michel Boucly said.
“If green chemicals only represent 1 percent of the chemical sector today, it’s because they face a petrochemical industry that has developed ultra-competitive products.”
The rapeseed-based ingredient would also allow wood panel manufacturers, notably furniture makers, to reduce use of formaldehyde, a traditional resin component that has been classified as a cancer risk.
The joint venture, called Evertree, expects to sell its product at between 2 and 7 euros a kilo, representing potential turnover of around 200 million euros at full capacity under its current plan, its CEO Fabrice Garrigue said.
$1 = 0.9094 euros Reporting by Gus Trompiz; Editing by Mark Potter
Our Standards: The Thomson Reuters Trust Principles.