The R$1.3bn ‘good bacteria’ seek new markets

In the mid-1990s, a 21-year-old boy approached the management of chocolate manufacturer Lacta offering the use of bacteria as a solution to a problem in the production line. “You’re crazy,” was what he heard. Sometime later, however, the then tie salesman Luiz Chacon heard a very different reaction from the same executives. “Set up a company and we will buy it from you.”

Some 25 years later, with revenues of R$800 million in 2021, two factories, a research center, and 600 employees, including 70 researchers, Superbac still faces the initial challenge of showing the benefits that biotechnology offers with the “good bacteria”. With 90% of its revenue coming from agribusiness, the company plans to return to its origin and grow in segments such as sanitation, oil and gas, and retail. The projection for this year is a growth of 60% and revenues of R$1.3 billion.

“We are a process substitution company. There is no genius on our part. What we do is replicate what nature already does, in an accelerated way,” says Mr. Chacon. He adds that biotechnology allows to reduce or replace the use of chemicals and pollutants with sustainable alternatives using bacteria. “Being a pioneer is positive, but it imposes the challenge of changing the customer’s habit by new technology. This is costly and takes time.”

Mr. Chacon has a degree in business administration and no background in biology. He says he looked for experts from the University of São Paulo to find out which bacteria could solve Lacta’s problem. Then he started to culture the suggested bacteria in a homemade way in an office downtown he shared with a real estate broker.

When he closed his first contract with Lacta, Mr. Chacon looked for a company that could produce biotech products with scale and stability. He found a supplier in Wisconsin, in the United States, and started to import everything he sold in Brazil. “It is a region in the United States that concentrated brewers, who had experience in fermentation,” he recalls. In the 2000s and with the first contributions from angel investors, Mr. Chacon bought the American company.

The next step was to define a segment that would allow him to gain scale and start generating revenue. The option was to buy a small family-owned fertilizer company in the municipality of Mandaguari, in the state Paraná, in 2015, and start the construction of the research center in an area in front of the new plant.

To sustain the expansion over the years, Mr. Chacon went on to make successive capital raises, but always kept control of the company. Today Superbac is a privately held company, with audited earnings reports, a board of directors with professional members, and major partners such as Temasek, Singapore’s sovereign wealth fund, and the family office of the Pfeffer family.

Going public is not ruled out, but it is not a short-term alternative and is unlikely to be carried out in Brazil. The American market already has biotechnology companies with open capital and can price the sector better, Mr. Chacon says.

With the end of the construction of the R$200 million research center, and well positioned in agribusiness, Mr. Chacon defined 2022 as the beginning of diversification. The goal is to reduce dependence on fertilizers to 65% to 70% of revenues in three years. And in 10 years to have at least half of the revenue coming from other sectors.

“Thanks to agribusiness, in six years we went to revenues of R$800 million from R$20 million. Now it is time to expand into other sectors. The solutions already exist, and I have the scale to meet the new demand with the same strength as agribusiness.”

Today the company is in charge of all the sewage treatment of three cities in Israel, including Jerusalem.

Source: Valor International

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