Anellotech and Suntory Enter Next Phase of Strategic Partnership to Develop 100 Percent Bio-Based Plastics for Sustainable Beverage Bottles

Construction completed, installation to commence on fully-integrated
development and testing facility on plan to be operational in 2016

PEARL RIVER, N.Y.–(BUSINESS WIRE)–Anellotech, a sustainable technology company focused on producing
cost-competitive renewable chemicals from non-food biomass, today
announced that the Company has entered into the next phase of its
strategic partnership with Suntory Holdings Limited, one of the world’s
leading consumer beverage companies. Suntory’s diverse market-leading
beverage brands include Orangina, Schweppes, Ribena, Lucozade and
BRAND’S, as well as major alcohol brands, Yamazaki, Hibiki, Jim Beam,
Courvoisier, and Château Lagrange.


The partnership, which began in 2012 under a collaboration agreement
that has provided more than $15 million in funding to date, is focused
on advancing the development and commercialization of cost-competitive
100 percent bio-based plastics for use in beverage bottles as part of
Suntory’s commitment to sustainable business practices. Suntory
currently uses 30 percent plant-derived materials for their Mineral
Water Suntory Tennensui brands and is pursuing the development of a 100
percent bio-bottle through this partnership.

The Anellotech alliance with Suntory supports the development of
bio-aromatics including bio-paraxylene, the key component needed to make
100 percent bio-based polyester (polyethylene terephthalate, or “PET”)
for use in beverage bottles. As an integral component in the bio-based
value chain, Anellotech’s proprietary thermal catalytic biomass
conversion technology (Bio-TCatTM) cost-competitively
produces “drop in” green aromatics, including paraxylene and benzene,
from non-food biomass.

Today’s announcement marks a major milestone in making 100 percent
bio-based polyester and bio-based PET bottles a reality. With
construction now complete on its new, fully-integrated development and
testing facility (TCat-8™), Anellotech is ready to commence installation
with groundbreaking scheduled for late January 2016. Operational in
2016, this 25 meter-tall unit will confirm the viability and suitability
of the Bio-TCat process for scale-up, and generate the data needed to
design commercial plants using Bio-TCat technology. The TCat-8 unit was
jointly designed by Anellotech and its R&D partner IFPEN, and will use a
novel catalyst under joint development by Anellotech and Johnson
Matthey. After verification of the continuous operation of TCat-8,
Suntory plans to move ahead with studies to consider the development of
the first commercial-scale Bio-TCat plant.

“By focusing on the development of substitute materials to replace
petroleum in making everyday consumer products, we are expanding our
commitment to reduce the environmental burden of beverage packaging,
including reduction of CO2 greenhouse gas emissions,” said
Munehiko Takada, head of Packaging Material Development Department at
Suntory. “We are pleased with the progress Anellotech and its
industry-leading partners have made, which gives us confidence in their
ability to develop and commercialize a sustainable and cost-effective
process for producing bio-based aromatics.”

Suntory joins Anellotech’s existing partners IFP Energies nouvelles
(IFPEN), Axens, Johnson Matthey, and a multinational corporate investor,
which has provided a $7 million equity investment, the first tranche of
a total $10 million investment.

“We are pleased to enter the next phase of our partnership with Suntory
and further advance our technology to meet growing consumer demand for
products and packaging made from sustainable sources,” said David
Sudolsky, President and CEO of Anellotech. “Anellotech and some of its
alliance partners are already doing preliminary work to identify
potential feedstocks, sites and operating partners for an initial
commercial plant. With Suntory’s focus on bio-paraxylene, Anellotech can
now offer a unique opportunity to new partners interested in
bio-benzene-chain derivatives. This includes nylon, polycarbonate,
linear alkyl benzene for laundry detergent, and styrene for styrene
butadiene rubber.”

By starting from cost-advantaged feedstock and employing a solid
catalyst in just one fluid-bed reactor, Anellotech’s process can produce
the 100 percent bio-based aromatic chemicals that are used to make many
significant plastics. By going directly from biomass to BTX in this one
reactor, Anellotech does not make a highly-oxygenated bio-oil
intermediate product often seen in multi-step pyrolysis processes, and
avoids the need to add substantial amounts of costly hydrogen.

The Need for an Alternative

Approximately 54 million metric tons of PET are manufactured globally
each year. Despite strong industry demand, there is no
commercially-available, bio-based paraxylene on the market today. This
has limited the ability to make 100 percent bio-based PET at commercial
scale. By using Bio-TCat technology, Anellotech and its
partners are accelerating the development of bio-based paraxylene and
other widely-used chemicals including benzene, toluene and other xylenes
(commonly known as BTX) from non-food sources. This will allow for the
first cost-effective production and commercial realization of 100
percent bio-PET bottles for consumer use.

The ultimate competitive advantage of Bio-TCat over fermentation-based
technologies is derived from Anellotech’s use of a simple process
performed in one reactor-catalyst system. Other than biomass and
catalyst, there are no further inputs, apart from minor amounts of
hydrogen used downstream of the reactor to remove trace impurities prior
to further separation of the BTX. As a result, these bio-based aromatics
can be sold profitably against their identical, petroleum-derived
counterparts. Furthermore, because it uses renewable and abundant
non-food feedstocks, such as wood, corn stover and bagasse, the Bio-TCat
process is less expensive compared to those that use sugar-based
feedstock, and avoids competition with the food chain.

About the Anellotech Partnerships

Anellotech complements its world-class R&D team with in-depth,
highly-interactive, and long-term partnerships with leaders in process
development, catalysis, engineering design, and licensing to accelerate
development and drive cost-competitiveness. IFPEN is our process
development and scale-up partner, Johnson Matthey is our catalyst
development partner, and Axens is our partner for industrialization,
commercialization, global licensing and technical support.
Industry-leading strategic partners in the BTX supply chain, including
Suntory and another multinational corporate investor, have provided
capital to Anellotech. These high-caliber, results-oriented partnerships
provide the critical mass of expertise and market presence for the
successful commercialization of the Bio-TCat process technology.

Our development partners’ involvement is driven by future licensing and
engineering services revenues and catalyst sales to licensees, while our
operating company partners are motivated by obtaining early access to
cost-competitive bio-aromatics. This ensures an end-to-end collaboration
with a focus on technical and process economic success.

Anellotech continues to seek additional funding and strategic partners
to support the development of the Bio-TCat technology and participate in
its future success. These include companies interested in
cost-competitive bio-based benzene and toluene and their derivatives,
complementing Suntory’s strong interest in bio-paraxylene. The
technology also appeals to refiners with aromatics processing capability
or interest in aromatics as high-octane, non-oxygenated blend stock for
gasoline, biomass suppliers and others in the supply chain.

About the 100 Percent Bio-Based PET Bottle

Renewable resource-based processes to produce “drop in” green aromatics
need to be cost-competitive with conventional petroleum feedstocks to be
accepted by the industry. With Anellotech’s Bio-TCat technology,
non-edible biomass is converted into BTX. Using existing,
globally-available chemical processes, toluene can be further converted
into benzene and more xylenes, and the xylenes into purified paraxylene,
which is then converted into terephthalic acid (PTA). PTA can be
polymerized together with mono-ethylene glycol (MEG) in a 70/30 ratio
into PET resin for plastic bottles. Renewable bio-MEG produced from
sugar cane has already been introduced in some PET containers, including
Mineral Water Suntory Tennensui sold in Japan. By replacing
fossil-derived paraxylene with identical plant-based material,
production of 100 percent renewable PET becomes possible.

About Anellotech

Anellotech is a green innovation and technology company developing an
efficient and eco-friendly process for producing bio-based BTX from
non-food biomass. We use proprietary breakthrough technology to provide
these sustainable chemical building blocks, as an alternative to their
identical counterparts derived from fossil sources. By using biomass as
a source feedstock for aromatic chemicals, Anellotech is helping broaden
the world’s access to renewable chemical and energy sources, while
lowering these chemicals’ lifecycle carbon footprint to help reduce
greenhouse gas emissions.

About Suntory

Suntory
Group
, a $20 billion annual sales company, was founded in Osaka in
1899. The company, headquartered in Japan, is a world-leading
manufacturer of alcoholic and non-alcoholic beverages that operates a
wide range of businesses in Asia, Oceania, Europe, and other regions
globally. Suntory manufactures and markets a diverse range of brands,
including Orangina (Europe and Asia), Schweppes (Europe, apart from the
U.K. and Ireland), Lucozade and Ribena (U.K.), and BRAND’S (Asia).
Suntory also manufactures and markets a variety of top-quality alcoholic
beverages, such as world-renowned Japanese whisky brands Yamazaki and
Hibiki, beer including The Premium Malt’s, as well as wine produced in
collaboration with the famed winery, Château Lagrange. In May 2015,
Suntory purchased 100 percent of Beam Inc. (U.S.) for $16 billion
dollars and subsequently founded Beam Suntory Inc. The company is
currently enhancing sales efforts for Jim Beam, Courvoisier, and Maker’s
Mark, among other noteworthy products. The Suntory portfolio also
includes restaurant businesses with a focus in Mexican and Asian
countries, as well as flower businesses that created the world’s first
blue roses.

Based on Suntory’s corporate philosophy, “In Harmony with People and
Nature,” the company is pursuing various activities to reduce its
environmental impact, which will help safeguard our planet for the next
generation. Particularly, in the area of containers and packaging,
Suntory has begun working on the development of bio-based PET bottles
within the “2R + B” strategy (reduce + recycle + bio). Suntory is
committed to achieving a more efficient use of resources by replacing
petro-derived materials with renewables, reducing the amount of resin
used in packaging, and increasing utilization of recycled materials. In
order to “reduce,” Suntory advocates making everything lightweight –not
just the beverage bottles themselves, but also labels and caps. With
respect to “recycle,” Suntory has established the first bottle-to-bottle
mechanical recycling system in Japan. Lastly, for “Bio,” Suntory
currently uses 30 percent plant-derived materials for their Mineral
Water Suntory Tennensui brands.

Contacts

Anellotech Inc.
David Sudolsky, +1 845-735-7700
DSudolsky@anellotech.com
or
ICR
Cory
Ziskind, +1 646-277-1232
cory.ziskind@icrinc.com