BioAmber making plans for second production site

August 30, 2016 – Paul Morden, The Observer – BioAmber says its new plant in Sarnia has achieved operational milestones established by funding agencies and lenders.

The $141-million facility opened last year on Vidal Street where it began manufacturing bio-succinic acid, a building block chemical made from corn syrup.

The joint venture with Mitsui and Co. is the first world-scale production facility for Montreal-based BioAmber.

In a press release Tuesday, BioAmber said the Sarnia plant has achieved the final operation milestones as set out in a $20-million commercial loan with Comerica Bank, Export Development Canada and Farm Credit Canada.

Those milestone indicators include the overall efficiency of BioAmber’s fermentation technology, the plant’s operation and the quality of its final product.

“Our lenders had set out rigorous performance criteria for the Sarnia facility and achieving these milestones is independent validation of how well our plant is operating,” chief operating officer Frabrice Orecchioni said in the press release.

“Our facility is the world’s largest succinic acid plant, and our variable costs are competitive with petro-succinic acid at current oil prices.”

The Sarnia plant, which employs 60 workers, has also demonstrated greenhouse gas emission and financial performance targets set by Sustainable Development Technology Canada.

The company said that agency has completed third-party validation of the plant’s performance and approved a final grant payment of $1.45 million.

“With Sarnia up and running, BioAmber has established itself as a global leader in renewable chemicals,” Orecchioni said.

Earlier this summer, BioAmber reported its second-quarter sales were on track, climbing 73 per cent over the previous quarter.

“We have made excellent progress in the plant’s reliability and performance, while continuing to increase production levels and drive down unit costs,” CEO Jean-Francois Huc, said at the time.

Earlier this year, BioAmber reported it had an option on land at TransAlta’s Bluewater Energy Park in Sarnia as a potential site for a second plant, but added it was also looking at sites in Louisiana and Iowa.

Mike Hartmann, BioAmber’s executive vice-president, said Tuesday in an e-mail: “There should be news on the second plant in the coming months.”

In a filing earlier this year to the U.S. Securities and Exchange Commission, BioAmber said it plans to build a second plant to produce approximately 200,000 metric tons annually of bio-succinic acid and derivative products.

The first plant in Sarnia has a capacity of 30,000 metric tons, annually.

BioAmber said in the filing the company estimates the second plant will cost approximately $500 million (US) to build, and would be commissioned in late 2018, “assuming we achieve a financial close in late 2016.”

BioAmber said in the filing it was seeking minority equity partners for the second facility, as well as government support in the form of low-interest loans and loan guarantees.

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