As I’ve promised, I will post an update about my recent communications with Myriant regarding their partnership announcement with Bayegan.
Here are my Q&A with Alif Saleh, VP of Sales and Marketing at Myriant:
1.What are the market applications for bio-succinic acid targeted under this supply deal? What is the market potential for bio-succinic acid in Middle East, Eastern Europe and Africa?
Two core market applications for bio-succinic acid are urethanes and plasticizers. These markets are thriving in Bayegan’s Territory where several urethane and plasticizer products are produced locally for a local market that is becoming more and more concerned about the environmental footprint. Also, most petroleum based raw materials for these products are imported. This is where we found an opportunity to, together with Bayegan, grow the market for bio-succinic acid by taking advantage of its unique value proposition: green, less price volatile than its petro based option and without a green price premium and, in several cases, better performance. When certain commercial milestones are met, Myriant has agreed to negotiate a potential joint venture to build a bio-succinic acid plant in Turkey, which would make us even more competitive by offering local supply.
2. When will the 30m lb/year bio-succinic acid plant in Louisiana going to start operations? Is Bayegan going to start selling the bio-succinic acid from the 30m lb/year plant as soon as it started?
Our bio-succininc acid plant in Lake Providence is very close to completion. We are within striking distance—it’s a very exciting and incredibly busy time as we bring the plant online. Bayegan will purchase bio-succininc acid from Lake Providence, as well as from the U.S. expansion plant (per your question below).
3. Myriant previously announced that it is planning to expand capacity in Louisiana to 170m lb/year. Is this expansion still in the table and if so, is there a timeline for this expansion?
Yes, we are actively pursuing our U.S. expansions strategy and we expect to have the 170M lb/yr capacity online in 2015.
4. Will Bayegan also source its bio-succinic acid from this planned expanded capacity?
Original post on March 25, 2013:
The company announced at the AFPM that it has partnered with Turkish chemical trading company Bayegan Group to commercialize their bio-succinic acid in markets across the Middle East, Eastern Europe and Africa (or what they call “Territory” for the combined regions).
Under the deal, Bayegan has committed to annually purchase a pre-determined amount of Myriant’s bio-succinic acid for supply to customers in the Territory. Myriant has also granted Bayegan exclusive distribution rights of bio-succinic acid in the Territory. The two companies have also agreed to negotiate a potential joint venture to build a bio-succinic acid plant in Turkey subject to certain commercial milestones.
The interesting question on this news is what type of market applications the bio-succinic acid is going to be used for in these regions. The press release stated that succinic acid can be used in a variety of applications such as polymers, urethanes, plasticizers and coatings.
As I was writing this post, I was also trying to get more information from Myriant and hopefully will be able to share something soon that is not taken from the press release.
Myriant estimated that the annual worldwide market for succinic acid is $7.5bn in new and existing applications. The company expects to start producing their bio-succinic acid at its 30m lb/year first commercial plant in Lake Providence, Louisiana, US in the early part of this year.