Investments, Partnership

BioAmber, Vinmar on a 100ktpa bio-BDO plant

Here’s an exciting news from bio-succinic acid producer BioAmber. The company announced yesterday afternoon that it is planning to build a 100,000 ton/year bio-BDO plant somewhere in North America to be commissioned in 2017. The company has signed a take-or-pay contract with Vinmar International to purchase 100% of the bio-BDO produced at the new plant for 15 years. BioAmber will be obligated to sell exclusively to Vinmar, a privately held marketing, distribution and project development company based in Houston, Texas.

Vinmar also plans to invest in the BDO plant, taking a minority equity stake of at least 10%. As part of the deal, Vinmar also has a right of first refusal to invest in and secure 100% of the off-take from a second BDO plant that BioAmber would build in the future.

Vinmar said its business model is to sign long-term take-or-pay agreements. The company purchases the output of a plant and sells the product into the market, optimizing global logistics and marketing across its broad portfolio of chemicals. The company reportedly has considerable experience in marketing BDO, having been the principal off-taker of Saudi Arabia-based Sipchem’s 75 ktpa BDO plant in Jubail, from its start-up in 2005 until 2013.

Vinmar believes BioAmber’s bio-BDO route will offer customers competitively-priced BDO with an improved carbon footprint. BioAmber, in return, will be able to secure significant project financing for its first commercial BDO plant, and that the deal will significantly de-risk the construction and operation of the project.

BioAmber still plans to initially produce 4,000 tons/year of bio-BDO at a toll manufacturing facility in the US, which it expects to commission in 2015.  The tolling facility will convert bio-succinic acid produced at the Sarnia, Canada, plant that is currently under construction. Vinmar has also committed to purchase 100% of the BDO produced at the planned tolling facility.

More analysis and industry comments about this deal will be available at the Tecnon OrbiChem Bio-Materials newsletter.

By the way, here’s an interesting tidbit of information about Vinmar. According to the company’s website, Vinmar started in 1978 in a Queens, NY, apartment. I still have hope…

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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