According to the latest news from the chemical and plastic sector BioAmber Inc an industrial biotechnology company is all set to ink a 16 year contract with Vinmar International. With this, the company will be producing 210,000 ton per year take-or-pay contract for bio-based succinic acid (“SA”).
With this move both the companies have 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. According to the deal, 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.
According to the new deal this second manufacturing Unit 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.
The move was initiated after witnessing a huge demand of succinic acid in the region while the demand side has shown its inability to satisfy the growing demand. It was very important for companies and stakeholders to look for an opportunity to satisfy the growing demand of the product and this move would certainly be a milestone in meeting the growing demand.
With this deal 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.