Solazyme and Dow Enter into Contingent Global Commercial Offtake Agreement and Concurrently Sign Phase 2 Joint Development Agreement to Accelerate Commercialization of Bio-based Dielectric Insulating Fluids
New algal oil to provide higher flash point and increased functionality to dielectric insulating fluids for transformers and other electrical application
South San Francisco, Calif. – May 2, 2012 – Solazyme, Inc.(NASDAQ: SZYM), a renewable oil and bioproducts company, and The Dow Chemical Company (NYSE: DOW), announced today that they have entered into a contingent offtake agreement in which Dow has agreed to purchase from Solazyme all of its requirements of non-vegetable microbe-based oils for use in dielectric fluid applications through 2015, contingent upon Solazyme’s ability to supply such oils within agreed specifications and certain terms and conditions of the sale. These new, renewable and biodegradable bio-based dielectric insulating fluids offer increased fire safety thanks to higher flash points and provide additional functionality that may improve the operating efficiency and extend the useful life of transformers.
Concurrently, Solazyme and Dow have entered into a Phase 2 Joint Development Agreement (JDA2), an exclusive, multi-year extension of the current joint-development agreement including accelerated commercialization timelines based on Solazyme’s rapid progress in the production of tailored algal oils. JDA2 enables additional application development work to be conducted by Dow, due to Solazyme’s accelerated ability to scale up their uniquely tailored algal oil feedstocks. Consumption of Solazyme’s algal oil feedstocks is expected to significantly exceed the minimum estimated volumes of 8.5 million gallons (29,000 metric tons) starting in the second half of 2013 and through 2015. The offtake agreement contemplates that final pricing for the oil will be linked to certain items including Solazyme’s sugar-based feedstock costs.
“Solazyme’s unique biotechnology based oils platform has created a new market opportunity to develop and produce the next-generation of safe, renewable, dielectric insulating fluids, that provide increased performance benefits,” said Jonathan Wolfson, CEO, Solazyme. “We have continued to reach technological advancements ahead of schedule with Dow, enabling us to further progress our commercial relationship.”
"Solazyme is a leading company in the industrial biotechnology space, and its renewable oil technology platform provides a unique opportunity to significantly accelerate the development of next generation bio based non-vegetable dielectric insulating fluids,” said Tim Laughlin, General Manager, Dow Electrical & Telecommunications. "In the fast-growing space of bio-based dielectric insulating fluids, Solazyme’s tailored algal oils will serve as a technology platform for our continued efforts to bring innovative solutions to the power industry. Advanced field trials in transformers will be initiated to further prove the technology and value proposition of these new products in the near term. Based on the application work we have already completed to date, we are confident we are positioned to commercialize these oils in timelines consistent with Solazyme’s planned ability to manufacture the quantities we need.”
Solazyme, Inc. is a renewable oil and bioproducts company that transforms a range of low-cost plant-based sugars into high-value tailored oils. Headquartered in South San Francisco, Solazyme’s renewable products can replace or enhance oils derived from the world’s three existing sources – petroleum, plants and animal fats. Initially, Solazyme is focused on commercializing its products into three target markets: (1) fuels and chemicals, (2) nutrition and (3) skin and personal care. Solazyme's oils and fuels provide compelling solutions to increasingly complex issues of fuel scarcity, energy security and environmental impact while fitting into the pre-existing multi-trillion dollar fuel infrastructure. For more information, please visit our website: http://www.solazyme.com
Solazyme®, the Solazyme logo and other trademarks or service names are the trademarks of Solazyme, Inc.
About The Dow Chemical Company:
Dow (NYSE: Dow) combines the power of science and technology with the "Human Element" to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world's most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow's diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company's more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about Solazyme, including statements that involve risks and uncertainties concerning: its commercialization plans and commercialization timetable for tailored oils; the attributes of its oil applications; the potential ability of its oils to improve efficiency and extend the life of transformers; Dow’s potential future purchases of Solazyme oils and the volume and timing thereof; Dow’s future use of its oils for the dielectric market; and Solazyme’s ability to maintain its collaboration with Dow. When used in this press release, the words "will", "expects", "intends" and other similar expressions and any other statements that are not historical facts are intended to identify those assertions as forward-looking statements. Any such statement may be influenced by a variety of factors, many of which are beyond the control of Solazyme, that could cause actual outcomes and results to be materially different from those projected, described, expressed or implied in this press release due to a number of risks and uncertainties. Potential risks and uncertainties include, among others: Solazyme’s limited operating history; its limited history in commercializing products; implementation risk in deploying new technologies; its limited experience in constructing and operating commercial manufacturing facilities; delays related to construction, facilitization or start-up of production facilities; its access to adequate supply of feedstock on favorable terms; its ability to enter into and maintain strategic collaborations; its ability to obtain requisite regulatory approvals; and its access, on favorable terms, to any required financing. Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of Solazyme.
In addition, please refer to the documents that Solazyme, Inc. files with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2011, for a discussion of these and other risks. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. Solazyme is not under any duty to update any of the information in this press release.