$10 million from Ag Canada for Bioamber’s S-L plant

By Tyler Kula, from www.theobserver.ca  The Observer

More federal dollars have arrived to bolster BioAmber’s $125-million Sarnia-Lambton plant.

Wednesday, Agriculture Minister Gerry Ritz announced a $10-million AgriInnovation Program loan — part of the government’s Growing Forward 2 initiative — for BioAmber at Lanxess, where BioAmber’s biosuccinic acid plant is being built.

Construction is expected to wrap up by year’s end, officials said.

“Once it’s fully operational it’s estimated the plant will use the equivalent of three million bushels of Ontario corn annually,” said Ritz.

“This is great news for Ontario corn farmers who want to diversify their farm businesses.”

The first-of-its-kind in Canada commercial plant will use biosuccinic acid from corn sugar to manufacture products ranging from automotive parts to cosmetics. It’s expected to create about 50 permanent jobs and produce 30,000 tonnes per year at startup, Ritz said.

A 20,000-tonne expansion is planned within a year, company officials have said, eventually leading to an estimated 155 jobs at the Sarnia plant by 2019, said Ritz.

“I want to congratulate BioAmber on this exciting new venture,” he said. “Our government is pleased to be a partner in projects that provide growth and prosperity to Canadian farmers and the sector as a whole.”

Creating more markets for crops tends to raise prices: good news for farmers, he said, adding the plant — and others like it in the future — could lead to new varieties of corn grown in Ontario specifically for biosuccinic acid.

“This is like the Internet in the late 90s,” said company CEO Jean-Francois Huc.

“Fifteen years from now we’re not going to believe how much of our agriculture, biomass, waste, corn and other, are being transformed into value-added products and ending up in everything from tires to automobiles, to the plastic cups we use, to the cosmetics, everything.”

Both he and executive vice-president Mike Hartmann said they were thrilled with the $10-million loan.

“I think it makes a lot of sense that Canada is involved in this and it’s a big project,” Hartmann said.

Details of the loan repayment aren’t being made public, Ritz said.

BioAmber raised $71.9 million in an initial public stock offering, arranged a $25-million loan from Hercules Capital and has received other provincial and federal government funding for the Sarnia project announced in 2011.

The Montreal-based company has partnered with Mitsui & Co. for the Sarnia plant, and two other facilities it plans to build.

Sarnia is in the running for those other plants, including a 100,000-ton bio-based butanediol (BDO) plant, expected to cost between $330 million and $350 million to build. BDO is made from biosuccinic acid and used in things like plastics and spandex, Hartmann said

“We’re in the process of doing site evaluations throughout North America,” he said.

But Canada and Sarnia are well-positioned for the future, Huc said.

“We’re very excited to be on the leading edge, but this is just the beginning.”

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