Earnings, Event, Investments, Video

BioAmber Interview at NYSE

Before I start with this post, I just wanted to say thank you for those companies who have already subscribed to Tecnon Orbichem’s new Bio-Materials & Intermediates service! We are thrilled to have very many positive response within a short time of introducing the service.

Now onto the blog’s interview with BioAmber CEO Jean-Francois Huc yesterday morning when the company rang the opening bell at the New York Stock Exchange (NYSE).

BioAmber recently finished its IPO (initial public offering) and was able to raised $80m in capital. On July 18, BioAmber also closed a $25m three-year term loan with Hercules Capital. The financing and the capital from the IPO will enable BioAmber to proceed with the construction of its 30 ktpy bio-succinic acid facility in Sarnia, Ontario. BioAmber estimated during the IPO proceeding that the cost of the Sarnia facility will be around $125m.

According to Huc, the most important thing in the listing is securing the funds to make Sarnia up and running and then bringing to the market bio-butanediol (BDO), an important derivative that uses succinic acid as feedstock.

“Our customers and shareholders need to see us go to the next step, which is to commission the 30 ktpy  facility and to start selling significant quantities of succinic acid. The reason we were able to go public, despite the difficult environment, is because we’ve been able to demonstrate our technology in a large-scale capacity through the Pomacle facility in France. We’ve taken the risk of scale out of the equation and now we had the funding in place with the IPO proceeds.” – Jean-Francois Huc

The Sarnia plant is expected to be commissioned in the second half of 2014. Their toll manufacturing in Pomacle, France, will stop production when the Sarnia facility comes online. As for bio-BDO, BioAmber plans to bring online a capacity of between 2,000 tpy and 4,000 tpy through a toll manufacturing facility in the US by the end of 2014 or early 2015.

The bio-BDO process will use catalysts that the company has licensed from DuPont and further developed with Evonik. Huc said the catalysts will be shipped to the toll manufacturing facility, and the bio-succinic acid supplied from the Sarnia facility will undergo hydrogenation and subsequent distillation/purification.

“That’s why we have invested heavily in the DuPont BDO technology to have that integrated processing from sugar all the way through to, not only succinic acid, but also derivatives like BDO and GBL (gamma butyrolactone). This is very important to our strategic goal.” – JF Huc

Huc noted that they can economically produce BDO from their very low-cost succinic acid. By focusing on BDO, the company will not have to worry about a flooded succinic acid market (as several others such as Myriant and Reverdia have already started their bio-succinic acid capacity and Succinity also planning to start their own capacity next year). BioAmber said it is still committed to its planned bio-succinic acid and bio-BDO capacities expansion with its partner Mitsui, but the focus for now is on Sarnia.

“We need to get that plant up and running, and anything that diverts resources – whether human resources or financial resources – away from Sarnia is a distraction for us. We are not going to do anything else until Sarnia is complete. The next step beyond Sarnia is really bringing commercial-scale BDO capacity online.” – JF Huc

Given that most recent public offering in the industrial biotechnology landscape have not performed well, Huc said the company is still quite bullish the sector as a whole is going to deliver and make significant progress in the next 12-18 months.

“We are feeling very confident that a lot of the companies in this sector are turning the corner now. We are seeing clear progress with Gevo; Amyris is overcoming some of the problems they’ve had in the past and Solazyme seems to be progressing well,” said Huc.

“As far as we are concerned, we offered investors a clear path to being a profitable business with very limited technology risk. We are confident that we won’t face some of the challenges that our peers — other companies that come before us have faced. At the same time, I think a lot of those companies are sorting out their problems, I think the industry as a whole should rebound and have a lot of positive attitude in the next two years.”

About Doris de Guzman

Will Green Chemistry save the world or is it hype?

Doris de Guzman examines alternative processing, new technology, R&D and other sustainability initiatives aimed at preventing pollution; replacing ingredients; and using renewable feedstocks in Green Chemistry.

She has been covering the oleochemicals market for 15 years and spread her beat to inorganics, biofuels and green chemistry.

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