Site preparation underway on Vidal Street
August 28, 2013
By Paul Morden, from www.theobserver.ca The Observer
A $12-million federal loan announced Wednesday put another piece of the financing in place for a $125-million bio-succinic acid plant Montreal-based BioAmber is building in Sarnia.
Federal politicians made the announcement at Lanxess, next door to the Vidal Street site where work on an access road, and other preparations for the new plant, have begun.
“We’re very excited to see that things are progressing,” said BioAmber CEO Jean-Francois Huc.
The company already has 10 employees in Sarnia, an engineering firm in place and is close to hiring a contractor for the building project expected to be completed by the end of 2014, he said.
“We’re getting ready for the next stage of construction, which is setting down the foundation and erecting the building.”
That’s expected to create 150 construction jobs, and 60 permanent jobs once the 30,000-tonne facility begins using sugar from corn to produce bio-succinic acid used in products ranging from automotive parts and disposable cultery, to cosmetics.
Company officials have said they plan to expand production in Sarnia to 50,000 tonnes within a year of starting up the plant.
BioAmber recently 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.
“We are now financed to build this plant,” Huc said. But, he added the company is seeking additional loans to help fund the project “more efficiently.”
Gary Goodyear, minister of state for the Federal Economic Development Agency for Southern Ontario, attended Wednesday’s event where Sarnia-Lambton MP Pat Davidson announced the loan.
Goodyear said providing the funding in the form of a loan has advantages.
“The Canadian taxpayers get their money back, and we still create jobs and help the environment, and diversify local economies,” he said.
It can be hard for projects like BioAmber’s to get financing from traditional sources when the economy is down, Goodyear said.
“The federal government can’t wait around for the economy to recover. We have to participate in that recovery and this is how we do it.”
Goodyear said the federal agency providing BioAmber’s loan has provided $21 million to more than 40 Sarnia-Lambton projects.
“I think that BioAmber can be the beginning of something great and innovative for the Sarnia area” by helping to create ” a cluster” of bio-chemistry companies in Chemical Valley, said Davidson.
Huc said Sarnia offers a skilled workforce experienced at building plants, a culture of industrial safety, a rich agricultural area to draw raw materials from, and other advantages for companies like BioAmber.
“You put all that together, and you’re hard pressed to find another place in North America that offers this,” he said.
“As people see that we’re actually starting to build, and they see this project coming to fruition, it will be much easier for second, third and fourth companies to set up here in Sarnia and benefit from the same things we’re benefiting from.”