BioAmber Sarnia’s new bio-based succinic acid plant, the first and only commercial scale production plant of its kind in the world, will receive a $12 million investment from the Harper Government to support its construction in Sarnia.
The announcement was made by Patricia Davidson, Member of Parliament for Sarnia–Lambton, alongside the Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario (FedDev Ontario). The plant is expected to create 150 construction jobs and 60 permanent jobs once the plant is operational at the end of 2014.
“Our Government is proud to invest in companies that are forming the foundation of a strong green economy in Canada,” said MP Davidson. “We welcome BioAmber to this community and look forward to seeing the company evolve and prosper alongside the rest of Sarnia’s growing chemical cluster.”
Succinic acid is a chemical used in the manufacturing process of many everyday products, such as plastics, cosmetics, automotive parts and construction materials. BioAmber has developed a proprietary process to produce bio-succinic acid sustainably from renewable feedstocks, instead of petroleum.
“Sarnia’s unique chemical and transport infrastructure, highly skilled workforce, excellent post-secondary institutions, and proximity to rich agricultural land make it the ideal place for BioAmber’s bio-based succinic acid plant,” said Minister Goodyear.
“This investment will help position Sarnia as a hub for bio-chemical research and innovation, further diversifying the region’s economy and establishing the conditions for long-term prosperity in southern Ontario.” A repayable contribution of up to $12 million through FedDev Ontario’s Prosperity Initiative is being provided for the construction and operation of BioAmber’s $110-million bio-succinic acid plant.
“We are grateful for the support given by FedDev Ontario to BioAmber Sarnia to build a commercial scale bio-based succinic acid plant and in helping develop a new bio-based chemical cluster in Sarnia,” said Jean-François Huc, President and Ceo, BioAmber. “This initial 30,000-tonne capacity plant is an important step in changing the way the world makes products that historically have only been made through the traditional petro chemical route.”
BioAmber says that it can profitably produce the bio-based chemical so long as oil prices stay above $35 (U.S.) a barrel. At a $95 crude price and a $6.50 per bushel corn price, it expects its costs will be 50 per cent lower than a petrochemical competitor.
Created in 2009, FedDev Ontario supports the southern Ontario economy by building on the region’s strengths and creating opportunities for jobs and economic growth. In Budget 2013, the Government of Canada demonstrated its continued commitment to workers, families and communities in southern Ontario with the renewal of FedDev Ontario.
Economic Action Plan 2013 provides $920 million over five years for the Agency, starting on April 1, 2014. As part of the renewal, FedDev Ontario will be allocating $200 million over five years for a new Advanced Manufacturing Fund in Ontario.
BioAmber was established in December 2008 as DNP Green Technology, when the succinic acid assets were spun off from Diversified Natural Products. Following the spin off, the company’s shares were distributed to Diversified Natural Product’s shareholders, making BioAmber a standalone legal entity with no ties to Diversified Natural Products.
In the fall of 2009, DNP Green Technology completed a $12 million financing with a group of institutional investors led by Sofinnova Partners, a leading European venture capital firm, and including Mitsui & Co. Venture Partners, the venture arm of the Japanese trading powerhouse Mitsui & Co, and Samsung Ventures, the venture arm of the Samsung Group, one of Asia’s largest industrial groups. Other investors included the Cliffton Group, a Canada-based real estate group with interests in clean tech.
In the fall of 2010, DNP Green Technology acquired 100% of the shares of its Bioamber joint venture from ARD. Concurrent with the acquisition of the joint venture, DNP Green Technology changed its name to BioAmber Inc. Siclae, a leading European agricultural group and the principal shareholder of ARD, became a shareholder in BioAmber through the transaction.
BioAmber raised two additional rounds of capital in 2011 and 2012, with gross proceeds of $75 million, with Naxos Capital Partners and Lanxess Corporation become shareholders.
In May 2013, BioAmber completed and Initial Public Offering on the New York Stock Exchange, under the symbol BIOA. The company raised $80 million in gross proceeds and issued warrants giving investors to purchase an additional $44 million of common shares.