American Refining Group, Inc. (ARG) and Novvi LLC, a joint venture of Amyris, Inc., an integrated renewable products company, and Cosan S.A., one of the largest corporations in Brazil, with businesses in energy, and infrastructure including lubricants, last Tuesday announced that ARG has committed to a 33.3% equity investment into the joint venture. Both Amyris and Cosan will continue to hold share ownership stakes in Novvi, together with ARG.
Novvis products and technology deliver sustainable, high-performance solutions in a range of lubricant applications. ARGs Bradford, Pennsylvania refinery, founded in 1881, is the oldest continuously operating refinery in North America.
Our launch of Novvis synthetic base oils has been embraced by manufacturers in a range of top-tier lubricant segments, across both automotive and industrial applications, stated Jeff Brown, Novvi LLCs CEO. Our partnership with American Refining Group will help accelerate our growth by providing the necessary resources to ensure manufacturing, supply, and delivery capabilities to scale our business for volume and to meet customer expectations.
ARGs Bradford refinery was built on innovation and market leadership in 1881, and today we are seeing a change in the hydrocarbon economy, coupled with performance requirements in the base oil industry. This is an opportunity for ARG to lead the market once again this time with a renewable product, stated Tim Brown, Chief Executive Officer, American Refining Group, Inc. When we explored the value and synergies, we were struck by the enormous benefit to both companies. The potential benefits cut across our base oil, finished lubricants, solvents, and drilling fluids businesses.
Tim Brown continued, Furthermore, environmentally-conscious, energy-efficient products have always been a core interest to ARG and Novvis products allow that with Amyris's No Compromise® performance.
Greater energy efficiency and durability are key growth drivers in high-performance base stocks and lubricants. Together, American Refining Group and Novvi believe that a novel, performance-based, technology platform that couples segment-specific, top-tier performance with sustainable, bio-based feedstocks delivers against the needs of the industry today and in the future.
We are very pleased with ARGs financial, technical and commercial support of Novvi and their participation along with the strong demand for Novvi technology enables us to significantly grow into another billion dollar market for our farnesene technology, said John Melo, President and CEO of Amyris. This agreement is the first of several we expect this year where we are divesting from non-core marketing activity while remaining key technology developers and producers of high performance chemistry that is remaking the world in a more sustainable way. And, with ARGs support, we have the opportunity in working together with Cosan to more quickly expand the availability of renewable products into the global markets for base oils and lubricants, which are expected to reach $42 billion and $70 billion in size, respectively, by 2020*. This market is yet another example of how Amyriss farnesene is able to support the growth of large and diverse markets.
American Refining Group converts hydrocarbon feedstocks into high-quality waxes, lubricant base oils, gasoline and fuels, as well as a wide variety of specialty products. ARGs state-of-the-art blending and packaging facilities located in Bradford, PA -- are capable of producing a full spectrum of finished lubricant products.
Novvi LLC is a market leader in renewable oils and is a joint venture of Amyris, Inc., American Refining Group, Inc., and Cosan S.A. Industria e Comercio. Novvi produces targeted hydrocarbon molecules from plant sugar for automotive, industrial, marine, and construction applications at unbeatable economics.
Amyris and No Compromise are registered trademarks of Amyris, Inc. All other trademarks are the property of their respective owners.
* According to independent market research firms MarketsandMarkets (March 1, 2016) and Grand View Research (January 28, 2015), respectively.