Jim Lane
A quick overview of BioAmber (BIOA)
Company description
From the company’s 2013 S-1: “Our proprietary technology platform
combines industrial biotechnology, an innovative purification
process and chemical catalysis to convert renewable feedstocks
into chemicals that are cost-competitive replacements for
petroleum-derived chemicals. The development of our current
organism was originally funded by the DOE in the late 1990s, was
further developed and scaled up, and optimized at the large-scale
manufacturing facility in France.
“We manufacture our bio-succinic acid in a facility using a
commercial scale 350,000 liter fermenter in Pomacle, France…We
have produced 487,000 pounds, or 221 metric tons, of bio-succinic
acid at this facility…We believe we can produce bio-succinic acid
that is cost-competitive with succinic acid produced from oil
priced as low as $35 per barrel, based on management’s estimates
of production costs at our planned facility in Sarnia, Ontario and
an assumed corn price of $6.50 per bushel.
“We have secured funding to construct the initial phase of our
next global-scale facility in Sarnia, Ontario and we intend to
build and operate two additional facilities, one located in
Thailand and the other located in either the United States or
Brazil.
Rankings
30 Hottest Companies in Biobased Chemicals & Materials: #9,
2014-15
The Situation
Last May, we wrote: “What is exactly so special about a company
making roughly 65 million pounds of a little-known renewable
chemical, with a historically tiny global market? After all, that
is roughly equivalent, by tonnage, to a 10 million gallon
first-gen biofuels plant — the kind that generally closes down
these days because of a lack of economies of scale.
There are three reasons that we are looking carefully at
BioAmber.
First, as former DOE Biomass Program Manager Paul Bryan opined at
ABLC last year: “Focus on the right products first.” Bryan keyed
in on biosuccinic in his ABLC presentation, highlighting the
opportunities and advantages relating to the utilizing the oxygen
in biomass.
Second, BioAmber is avowedly pursuing a strategy based in careful
aggregation of strategic partners that bring investment and
offtake as well as financing relationships, while building further
applications for their molecules in work with R&D partners
that could be expected to translate into commercial partners down
the line. Which is to say, starting with an economically and
environmentally advantaged molecule and then working in
partnership with downstream customers to establish markets for
that molecule.
Third, the process is cost-competitive with $35 oil.
Bottom line: It’s very different than the conventional biobased
fuels strategy, which has been to set mandates to create market
certainty, and use that to create a favorable financing
environment, and encourage engagement with incumbents.
Top Milestones for 2012‐14
1. In December 2014, BioAmber
announced it had signed an exclusive supply agreement for
bio-based succinic acid with Oleon. Under the terms of the
5-year contract, which runs from 2014 to the end of 2018, BioAmber
Sarnia, a joint venture with Mitsui & Co., will supply Oleon
with bio-based succinic acid for the development and production of
succinate lubricants.
2. In July, BioAmber priced a 2.8M share offering at
$12.00 per share, and raised $33.6M. The company granted the
underwriters in the offering a 30-day option to purchase up to an
additional 420,000 shares of its common stock. Net proceeds, after
underwriting discounts and commissions and other estimated fees
and expenses payable by BioAmber were approximately $31.1 million.
3. In July 2014, the company announced 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 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,
Canada.
It was just last week that the company announced 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 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, Canada.
4. In May 2014, BioAmber announced a contract to supply a minimum
of 80% of PTTMCC Biochem’s total bio-succinic acid needs until the
end of 2017. PTTMCC Biochem is a joint venture established by
Mitsubishi Chemical and PTT, Thailand’s largest oil and gas
company, to produce and sell polybutylene succinate (PBS), a
biodegradable plastic made from succinic acid and 1,4 butanediol
(BDO). The JV partners are building a PBS plant in Map Ta Phut,
Rayong, Thailand that will have an annual production capacity of
20,000 tons, and is expected to be operational in the first half
of 2015. The PBS plant in Thailand will consume approximately
14,000 tons of succinic acid per year at full capacity — under the
new agreement, BioAmber could supply a minimum of 11,200 tons of
bioisuccinic acid if that PBS plant operates at full capacity.
BioAmber plans to supply PTTMCC from its 30,000 ton per year plant
under construction in Sarnia, Canada.
5. In May 2013, BioAmber announced the pricing of its initial
public offering of 8 million units consisting of one share of
common stock and one warrant to purchase half of one share of
common stock at $10 per unit, before underwriting discounts and
commissions.
6. In September 2012, Inolex launched a new range of 100% natural
and sustainable emollients, using bio-based succinic acid from
BioAmber. The market for personal care esters is valued at over
$500 million. The new succinate emollients are highly-versatile
because of their sensory properties and outstanding ability to
disperse pigments. These fluids can be used in skin care, hair
care, color and antiperspirant products to provide shine and a
light fast-drying emolliency. These emollients are suitable as
alternatives to silicone fluids for improving skin-feel, as well
as enhancing shine and texture in hair care products. In natural
formulations, they can be used to reduce the greasiness of natural
oils.
7. In February 2012, NatureWorks and BioAmber, announced the
creation of their AmberWorks joint venture to bring new
performance bio-based polymer compositions to market. NatureWorks
brings to the joint venture a global commercial presence,
established customer relationships, developed applications across
a breadth of industries and deep experience in commercializing
new-to-the-world polymers. BioAmber owns PLA/PBS compounding
intellectual property and applies award-winning biotechnology and
chemical processing to produce renewable chemicals.
8. In February 2012, BioAmber raised $30 million in its Series C
round of financing with $20 million invested in November by Naxos
Capital, Sofinnova Partners, Mitsui & Co. Ltd. and the
Cliffton Group, and a second tranche of $10 million on February
6th, 2012 closed with specialty chemicals company LANXESS.
BioAmber and LANXESS are jointly developing phthalate-free
plasticizers and expect to begin sampling succinic-based
plasticizers in 2012.
Major Milestone Goals for 2015-17
1. Moving beyond succinic. The market for succinic acid itself is
relatively small. The key to BioAmber (and other developers, like
Myriant) is finding a market for biosuccinic as a “drop-in”
replacement for other, incumbent petroleum-based chemicals,
addressing what BioAmber termed “a more than $30 billion market
opportunity.” That claim is yet to be proved — and the hard yards
of commercialization lay ahead for the company to develop novel
markets at scale.
“We intend to convert bio-succinic acid to bio-BDO and THF, which
are large volume chemical intermediates that are used to produce
polyesters, plastics, spandex and other products.
“We intend to use our bio-succinic acid in the production of PBS,
which enables this polymer family to be partially renewable, and
modified PBS, or mPBS, which provides these products with higher
heat distortion temperature and improved strength.
2. New commercial plant. “We have begun early works on the site
in Sarnia including hooking up to the water and sewer system under
Vidal Street,” says the company’s Executive Vice-President Mike
Hartmann. “The $80 million project is being constructed at the
LANXESS Bio-Industrial Park in Sarnia.
The site is located in a large petrochemical hub with existing
infrastructure that facilitates access to utilities and certain
raw materials and finished product shipment, including steam,
electricity, hydrogen, water treatment and carbon dioxide,” the
Sustainable Chemistry Alliance newsletter reported. The plant was
expected to open in 2014. The company also intends to build a
second North American plant by 2017,
Business Model:
“For future facilities, the company writes, “we expect to enter
into agreements with partners on terms similar to those in our
agreement with Mitsui and we intend to partially finance these
facilities with debt. We expect to use available cash and the
proceeds of this offering to fund our initial facilities, as well
as our commercial expansion and product development efforts. For
additional future facilities, we currently expect to fund the
construction of these facilities using internal cash flow and
project financing.”
Competitive Edge:
1. Cost-competitive, renewable chemical alternatives that offer
equal or better performance.
2.. Using less feedstock per ton of output than most other
sugar-based processes for biochemicals other than succinic acid.
3. Significantly lower greenhouse gas emissions than the
processes used to manufacture petroleum-based products by
sequestering carbon dioxide in the process of producing
bio-succinic acid.
More about the company
The
latest corporate presentation is here.
Jim Lane is editor and
publisher of Biofuels Digest where this
article
was originally published.
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