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OTTAWA (Reuters) - It has been a bumpy ride for Canadian biodiesel producer BioX Corp, but some two years after the credit crisis stalled its IPO plans, the company has returned with a more modest listing.
BioX plans to use the C$46.7 million ($45.7 million) from its market debut last week to build a second production facility in Canada.
It's a big climb down from the four plants planned in 2007, before BioX's C$150 million listing was canceled when the commercial paper market collapsed.
"There's no question in my mind that we will be able to raise that kind of money, we just have to do it a little slower I'm afraid," Chief Executive Tim Haig said in an interview with Reuters.
"We had to hunker down for a couple of years and wait for the market to come back and learn more in the industry and push things along. So we're a far better company now."
Founded in 2000 with technology developed at the University of Toronto, BioX first began production at a Hamilton, Ontario, plant in 2007.
That followed nearly four years of fine-tuning, work fueled by about C$90 million raised in three rounds with investors such as Birch Hill Equity Partners, Dynex Capital and VentureLink.
Now, BioX says the time is right to expand its production capacity before a government mandate that will require 2 percent renewable content in all diesel fuel by 2012.
Canada currently produces about 130 million liters (34.3 million gallons) of biodiesel annually, but will need about 600 million liters (158.5 million gallons) to meet the government mandate. In the United States, it expects 1 billion gallons of biodiesel to be required annually by 2012, he said.
Haig, who launched BioX after working on wind farms in England for a decade, said his company's "feedstock agnostic" process can use anything from pure seed oils, to animal fat, to recovered vegetable oils such as restaurant waste grease.
The company claims its process is faster and more efficient than others, taking less than 90 minutes with a conversion yield of more than 99 percent.
"We have great technology and we need to get it out there," Haig said.
"The fact that we were able to raise money in a very difficult climate ... is a shot in the arm for our technology."
As investors better understand the impact of government policy on biodiesel demand, it will become easier to raise money, Haig said.
BioX's current facility produces about 67 million liters (17.69 million gallons) annually. The Oakville, Ontario-based company, which designs, owns and operates production facilities, is now scouting two Canadian provinces for its next plant.
Over the next decade, it plans to build 10 plants in North America and Europe, matching production capacity with government-mandated quotas.
Despite growing demand, the sector may face roadblocks. Canada ordered a study of the environmental impact of ethanol and biodiesel in January, citing evidence of harmful environmental effects.
Shares of BioX, which opened at C$2.02 on the Toronto Stock Exchange March 3, were down 10 Canadian cents in early trade on Friday at C$1.80 after the company issued first-quarter financial results.
BioX's net loss narrowed to C$1.07 million, or 5 Canadian cents a share, in the period ended December 31, from a loss of C$3.15 million, or 15 Canadian cents, in the same period last year.
Revenue dropped to C$11.5 million from C$12.5 million, reflecting a scheduled two-week plant shutdown for maintenance.
($1=$1.02 Canadian)
(Reporting by Susan Taylor; Editing by Frank McGurty)
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