The multinational UK-listed oil company BP has made its first significant investments in animal feed since exiting the sector 25 years ago. As well as an investment in the Calysta alternative feed protein business, it has formed a biofuels joint venture with Bunge in Brazil.
The company’s BP Ventures investment fund has bought a $30 million stake in Calysta. The California-based business uses a proprietary gas fermentation technology to make the FeedKind protein product, initially aimed at the aquaculture market, but with potential for the livestock and companion animal sectors too.
The FeedKind process grows a naturally occurring bacteria using methane as its carbon and energy source to produce a single cell protein that dried and pelletised for sale as a feed ingredient. It will use BP natural gas as a feedstock.
As well as a US production plant, Calysta established a pilot plant on Teesside – its Market Introduction Facility (MIF) – in 2016 to support market development work with animal nutrition companies around the world.
Calysta says BP’s investment will enable it to expand FeedKind production and support its global rollout. The feed material is marketed by Cargill.
“Welcoming BP as a partner is a tremendous step forward for FeedKind protein and the best indicator yet that Calysta’s solution to food insecurity in a resource-constrained world can and will achieve global scale,” Dr Alan Shaw, chief executive and president of Calysta. “Calysta will benefit from BP’s operational excellence and focus on safety when deploying multiple production plants.”
BP says the move supports its strategy of creating new markets in which gas can play a material role in delivering a more sustainable future. “By pairing Calysta’s exciting technology and entrepreneurial drive with BP’s global scale and gas market expertise, this partnership offers the opportunity to improve food security and sustainability for the world’s growing population,” says. BP group head of strategy Dominic Emery.
In a separate move, BP has agreed to form a 50:50 joint venture with Bunge – BP Bunge Bioenergia. This combines both companies’ biofuels and biopower businesses in Brazil “to create a world-scale, highly-efficient producer of sugarcane ethanol in Brazil”. The new venture will grow BP’s existing biofuels business by more than 50%.
Brazil produced 26 billion litres of bioethanol in 2018, almost all from sugarcane grown in-country. It is the world’s second largest and most integrated market for ethanol in transportation – some 70% of its vehicles are already able to run on ethanol and its national demand for ethanol in road fuel is estimated to increase by around 70% by 2030.
BP first entered the agribusiness sector in the mid-1970s, seeking to diversify its interests in the wake of the 1973 oil crisis. It acquired the Dutch feed business Trouw and the UK’s Cooper Nutrition Products, merging them into BP Nutrition. Over the next 20 years, this was built into one of the world’s leading feed businesses, before a change of corporate strategy saw the operation sold to a group of Dutch investors in 1994, to become Nutreco.
The company was also a founding investor in 2007 with Associated British Foods (ABF) and DuPont in the Vivergo wheat to bioethanol plant on Humberside which was commissioned in 2011. But BP sold its 47% stake to ABF in 2015.