Contract to accelerate? The economics to build or contract a pilot plant

Taking a biobased technology from a nascent idea to a commercial reality can be daunting. The focus of initial work often is strain engineering (i.e. demonstrating production of the target molecule) and fermentation performance to improve biocatalyst performance. To successfully progress from lab to commercial scale, organizations must overcome both technical and financial hurdles, which can derail even the most promising technologies.

Often, the transition to pilot scale is the first time a technology has left the founder’s lab. Organizations and investigators often ponder the pros and cons of building a pilot facility, but the lack of capital, experienced personnel, and experience with processes at pilot scale can quickly stifle the appetite to do so.

Pilot plants generally are capital intensive and have high fixed operating costs—the costs can easily reach $15mm - $25mm for CAPEX and millions in OPEX. A typical time investment of 18 – 24+ months to be fully operational is common. Forgoing construction of your own pilot plant is an economically and technically sound option if one utilizes a well-established facility with experienced, knowledgeable personnel for pilot processes. By minimizing sunk costs, burn rate, and focusing on core capabilities, an organization can accelerate their technology to commercialization while saving both significant time and money. These facilities often have well-trained staff with experience performing processes at a larger scale and organizations often benefit from the experience of others. 

In this talk, I will provide examples demonstrating the benefits of contracting pilot facilities to commercialize biobased technologies.