BioAmber signs take-or-pay contract with Vinmar
July 8, 2014, Minneapolis, Minn. - BioAmber Inc. announced it has signed a 210,000-ton per year take-or-pay contract for bio-based succinic acid with Vinmar International. Under the terms of the 15-year master off-take agreement, Vinmar has committed to purchase and BioAmber Sarnia has committed to sell 10,000 tons of succinic acid per year from the 30,000 ton per year capacity plant that is currently under construction in Sarnia, Ont.
July 8, 2014, Minneapolis, Minn. – BioAmber Inc. announced
it has signed a 210,000-ton per year take-or-pay contract for bio-based
succinic acid with Vinmar International. Under the terms of the 15-year master
off-take agreement, Vinmar has committed to purchase and BioAmber Sarnia has
committed to sell 10,000 tons of succinic acid per year from the 30,000 ton per
year capacity plant that is currently under construction in Sarnia, Ont.
BioAmber and Vinmar also broadened the scope of their
previously announced 100,000-ton per year 1,4 butanediol (BDO) plant, which the
parties currently plan to start up in late 2017. Under that agreement,
following the financing, construction and commissioning of the BDO plant,
Vinmar has committed to purchase and BioAmber has committed to sell 100% of the
BDO produced for 15 years. As part of the new succinic acid master off-take
agreement, this second plant will be expanded to an annual capacity of 100,000
tons of bio-BDO and 70,000 tons of bio-succinic acid. Vinmar plans to make a
10% or greater equity investment in the expanded plant and has committed to
off-take and BioAmber has committed to sell a minimum of 50,000 tons per year
of bio-succinic acid for 15 years following the plant's start-up date. Vinmar
also has the option to secure additional bio-succinic acid tonnage under the
take-or-pay contract if BioAmber has not committed the remaining volume at the
time the plant's financing is secured.
Vinmar also committed to off-take and BioAmber committed to
sell a minimum of 150,000 tons per year from a new, third plant following its
financing, construction and commissioning. The plant would be dedicated to
bio-succinic acid production and would have an annual capacity of 200,000 tons
per year. Vinmar plans to invest at least 10% of the equity in this third
plant, which BioAmber expects to start up in late 2020, based on the projected
development of the succinic acid market.
The Vinmar take-or-pay contract, together with the
take-or-pay agreement signed in April 2014 with PTTMCC Biochem guarantees the
sale of 50% of Sarnia plant capacity during the first three years of operation
and 33% of plant capacity for the following 12 years. In addition, BioAmber has
signed 19 supply and distribution agreements and seven memorandum of
understanding to date, and the cumulative volume of these contracts exceeds the
available capacity for sale in Sarnia. BioAmber has been selling bio-based
succinic acid for over four years and to date 38 customers have qualified the
company as a succinic acid supplier and purchased product from the existing production
facility in France.
"This multi-plant deal is a quantum leap forward for
our succinic acid business and sets a clear path for rapid growth," said
Jean-Francois Huc, BioAmber's Chief Executive Officer. "Securing off-take for three plants will
help us to obtain project financing and accelerate the deployment of our
platform. Our partnership with Vinmar gives us the capability to expand our
production capacity, gain economies of scale and guarantees the sale of a
significant portion of our output," he added.
"Vinmar is committed to growing the market for
bio-based chemicals, which have strong global trends favoring their
development," said Dr. Serge Verma, President of Vinmar Projects.
"Our long-term off-take contract with BioAmber reflects the potential we
see for succinic acid as a platform chemical that will substitute adipic acid
and other petro-derived building blocks.
We believe BioAmber's technology will effectively compete with these
chemicals, allowing us to market bio-based succinic acid into the merchant
market at competitive prices," he added.
Vinmar International is a leading marketer and distributor
of chemicals with sales of over $4 billion per year and annual volumes that
exceed 3 million tons.