Posted on 09/10/2006 7:57:05 AM PDT by calcowgirl
SIR RICHARD BRANSON has joined forces with two of America’s top venture capitalists to slake California’s thirst for environmentally friendly fuels.
Branson has injected more than $60m (£32m) into Cilion, a company that will make bioethanol from corn. He is investing alongside Vinod Khosla, the renowned Silicon Valley entrepreneur, and Ron Burkle, a Los Angeles billionaire who counts Bill Clinton among his advisers.
The project is the start of a move by Branson’s Virgin empire into environmental businesses, a plan known internally as the Gaia Capitalism Project, after the environmental theory developed by the British scientist James Lovelock.
Virgin Fuels, the subsidiary used for the Californian scheme, will alone invest $400m in several biofuel schemes, including some in Britain.
“We plan to move into this sector in a big way,” said Branson. “In a few years it will be a major field for us.”
Virgin Fuels is already working with the government on a scheme to make it economic for train companies to use biodiesel. Virgin would also like to develop a biofuel suitable for aircraft engines, although it concedes this could be a decade away.
Branson is understood to be considering other big investments in a range of other alternative-energy technologies, including wind power, hydro-electric and possibly even small nuclear stations. “Nothing is off the agenda,” said a top Branson aide.
The Californian scheme capitalises on an environmental crusade by the state’s governor, Arnold Schwarzenegger.
California already uses bioethanol to fuel cars, but almost all of it is imported from the American Midwest. Earlier this year Schwarzenegger issued an executive order calling for the state to make 20% of the fuel itself by 2010.
Cilion plans to build sufficient refining capacity to meet the target itself. It was set up in June as a $40m joint venture between Western Milling, one of California’s largest grain-milling companies, and Khosla Ventures, Vinod Khosla’s venture-capital company. Khosla, named America’s top venture capitalist by Forbes magazine, is best known as one of the founders of the technology company Sun Microsystems.
In a second-round fundraising completed last week, Cilion raised another $160m, more than $60m of which was provided by Virgin Fuels.
The rest was provided by Khosla, Western Milling and Yucaipa, an American private-equity business led by Burkle.
Yucaipa made its name with a string of big-ticket retail deals, and has on its board the former president Bill Clinton. Virgin’s representative on the Cilion board will be Shai Weiss, a former NTL executive who heads Virgin Fuels.
Cilion is expected to start work on the first of seven bioethanol plants within a few weeks.
It will bring corn from the Midwest by rail for processing, and says its technology makes it competitive with petrol at oil prices as low as $40 a barrel. Having gone as high as $78 this year, Brent crude closed the week at $63.50.
Branson, who attended the recent environmental summit in California between Tony Blair and Schwarzenegger, said he had been plotting a shift into environmental businesses for about two years.
“I have read a number of books on global warming and I am absolutely convinced that this is the biggest crisis that faces Earth and mankind.
“We have to do something about it. I think every company chairman should be thinking about devoting a percentage of his earnings to it.”
Branson finally blew it. It is way too expensive! Biodiesel is cleaner and way cheaper to produce.
The anti-ethanol naysayers need to get in here and inform Branson about the big mistake he's making. I mean, what does HE know?
I don't really believe in the whole global warming "crisis". That being said, if major progress is to be made in the area of alternative and bio-diesel fuels it'll come from capitalists and entrepeneurs like Branson. If his efforts lower fuel prices and reduce our dependency on Middle East oil - more power to him!
Gov. Schwarzenegger and British Prime Minister Tony Blair got a lot of favorable publicity with an agreement to work together to curb greenhouse gas emissions and collaborate on research to fight global warming.snip
... the meeting was held at a British Petroleum terminal in Long Beach and attracted such titans of the corporate world as Richard Branson of the Virgin Group, Charles Holliday of DuPont, Google founder Sergey Brin and Edison International head John Bryson. Many businessmen have figured out that when government manipulates the marketplace, there are large-scale profits to be made.
Richard Branson of Virgin, for example, after declaring concern for the planet, said he plans to invest in an ethanol plant in California. Ethanol has been touted as a magic bullet and the taxpayers subsidize it at 51 cents per gallon. But while it modestly decreases CO2 emissions, it reduces miles per gallon compared to straight gasoline.
" magic bullet and the taxpayers subsidize it at 51 cents per gallon."
Good catch calcowgirl! When the worlds investors come out in droves with biodiesel(which is cheaper, and doesn't decrease gas milage, that 51 cent subsidy will go by the wayside, and these jerks will be holden their groin : )
Nah... by then, they will have made their millions, taken the company public, and divested their stock holdings. The shareholders will be held holding the bag--or their mutual fund.
Vinod Khosla and this bunch or 21st century robber barons are the same ones using the initiative process to push new taxes and wealth redistribution on businesses and citizens. I'm for letting the market work--these scum are for having government aid and abet their quest for (even greater) wealth.
I notice Branson is going to diversify his investments in many different biofuels and energy producing methods. Ethanol has its limits.
Just to paint more of the picture...
http://www.contracostatimes.com/mld/cctimes/news/politics/15485858.htm
Among the most contested environmental bills on [the Governor's] desk:
... • Assembly Bill 1012 by Assemblyman Joe Nation, D-San Rafael. Requires half of all new cars sold in the state to run on alternative fuels by 2020.
The must be one of the next steps of the new world order. With Mr. Zero Population Ford resigning his job; I wonder what next?
http://sev.prnewswire.com/biotechnology/20060912/SFTU09512092006-1.html
Cilion Successfully Completes its Second Round of Capital Raising, and One of the Largest in the Fast Growing Bio-fuels Sector
GOSHEN, Calif., Sept. 12 /PRNewswire/ -- Cilion, a California-based company with plans to build multiple ethanol plants, today announced one of the industry's largest capital raises totaling over $200 million. In June, the company announced the formation of Cilion with a partnership between Western Milling, one of California's largest grain milling companies, and Khosla Ventures, a venture assistance and venture capital firm. Cilion will operate modular, standardized 55 million gallons per year ethanol plants using India-based Praj technology. Using a variety of innovations, these plants will be greener and less expensive than standard corn-to-ethanol plants, therefore substantially reducing the consumption of traditional energy sources in ethanol production.
Joining the partnership with Western Milling and Khosla Ventures for this round of equity are some notable investors including the Virgin Group through the newly formed Virgin Fuels, the Yucaipa Companies and Advanced Equities, Inc. Sir Richard Branson recently launched Virgin Fuels, as part the Virgin Group and brand, and plans to invest up to $400 million in renewable energy initiatives over the next three years. Yucaipa is a premier private equity investment firm that has established a record of fostering economic value through the growth and responsible development of companies. Advanced Equities specializes as a venture capital investment bank, headquartered in Chicago, with institutional and retail sales nationwide.
Kevin Kruse, CEO of Cilion, Inc. noted, "This is really a landmark event. Cilion has a business plan focused on low cost production using multiple feedstocks and energy saving technology. The company's strategy is focused on building and operating destination ethanol plants which are closer to consumers. Together with our existing and new equity partners, Cilion will be a significant contributor to reducing our nation's reliance on fossil fuels."
Commenting on the deal, Sir Richard Branson said, "This is a very exciting investment for Virgin and the new company will make a substantial contribution to meeting Governor Schwarzenegger's goal as stated in his recent Executive Order, calling for California to produce a minimum of 20% of its own bio-fuels by 2010. We have excellent founding partners in Cilion. The industry experience of Western Milling and Khosla Ventures' track record of building successful companies will complement Virgin's global expertise in backing entrepreneurs to build successful companies that make a difference."
Vinod Khosla, of the nation's most influential ethanol advocates, said, "The combination of Cilion's management experience in grain handling and the destination plant model near cattle feedlots eliminating the need for fossil energy use for drying distillers grain will make Cilion not only a low cost producer but also a very environmentally friendly ethanol producer. I am excited to partner with this high quality group of investors as we move forward."
Western Milling:
Western Milling, one of California's largest grain milling companies, has a long manufacturing history dating back to 1935. Western Milling continues to operate under the foundation and beliefs on which the company was built and firmly stands by the philosophy: "Know and respect thy customer and strive for his success." -- Otto Kruse, 1935. Western Milling brings tremendous experience in grain procurement, operating efficiencies of the grain milling industry and a sales force with key relationships within the livestock industry. This sales force (including 5 PhD's) is experienced in marketing wet distillers grain resulting in the Cilion ethanol plants consuming 33% less natural gas than typical ethanol standards. In addition, in 2004 Western Milling built and operated the only large scale ethanol plant located west of the Rocky Mountains in Goshen, CA. The management team of Western Milling along with Cilion bring key operating experience in livestock nutrition, grain procurement, marketing, and finance.
Khosla Ventures:
Khosla Ventures offers venture assistance, strategic advice and capital to entrepreneurs. The firm helps entrepreneurs extend the potential of their ideas in both traditional venture areas like the Internet, computing, mobile, and silicon technology arenas but also supports breakthrough scientific work in clean technology areas such as bio-refineries for energy and bioplastics, solar, battery and other environmentally friendly technologies. Vinod Khosla, formerly a General Partner at Kleiner Perkins and founder of Sun Microsystems, founded the firm in 2004. Vinod has been labeled the #1 VC by Forbes and Fortune recently labeled him as one the nation's most influential ethanol advocates, noting "there are venture capitalists, and then there's Vinod Khosla." Khosla Ventures is based in Menlo, California.
Virgin Group:
Virgin, a leading branded venture capital organization, is one of the world's most recognized and respected brands. Conceived in 1970 by Sir Richard Branson, the Virgin Group has gone on to grow very successful businesses in sectors ranging from mobile telephone, to transportation, travel, financial services, leisure, music, holidays, publishing and retailing. Virgin has created more than 200 companies worldwide, employing approximately 35,000 people in 29 countries. Revenues around the world in 2005 exceeded 5 billion pounds Sterling (US$10 billion).
Virgin Fuels:
Virgin Fuels is the investment vehicle for a series of international renewable energy investments by Virgin Group with an early focus on bio-fuels (rather than other alternative energy sources or industrial power generation). The scope of the investment strategy will also include research and development of new bio-fuels suitable for both ground transportation and aviation.
Virgin Fuels has an initial funding commitment from the Group of up to $400 million. Early investments are expected to be in the United States, closely followed by the UK, mainland Europe and the rest of the world.
The Yucaipa Companies:
The Yucaipa Companies is a premier private equity investment firm that has established a record of fostering economic value through the growth and responsible development of companies. As an investor, Yucaipa works with management to strategically reposition businesses and implement operational improvements, resulting in value creation for shareholders, customers and employees. Since its founding in 1986, the firm has completed mergers and acquisitions valued at more than $30 billion.
Advanced Equities, Inc.:
Advanced Equities is a privately held financial services firm, recently ranked #11 in INC. magazine's top 500 privately held growth companies and regarded as one of the fastest growing brokerage firms in the country. Advanced Equities specializes as a venture capital investment bank, headquartered in Chicago, with institutional and retail sales nationwide.
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