Sustainable chemicals company BioAmber Inc. has announced that its Canadian subsidiary BioAmber Sarnia Inc., a joint venture with Mitsui & Co., has secured a $20-million commercial loan from a financial consortium led by Export Development Canada and including Farm Credit Canada and Comerica Bank.
The $20 million will be used to complete the ongoing construction of the $80-million Sarnia plant and fund its start up and commissioning.
Succinic acid is most often used in the food and beverage industry, primarily as an acidity regulator. It's also used in pharmaceuticals. Global production is estimated at 16,000 to 30,000 tonnes a year, with an annual growth rate of 10 per cent. While the common industrial scale production method of succinic acid was petroleum derived, companies like BioAmber and BASF are looking to renewable plant based feedstocks.
The $20-million senior secured loan will bear interest at an initial rate of eight per cent, tied to an agreed-on floating rate calculation from disbursement. The loan’s principal will be reimbursed over a period of six and a half years, commencing three months after the completion of the commissioning and start-up phase of the Sarnia plant.
When completed in early 2015, the Sarnia plant will be the world's largest bio-based succinic acid production facility. The plant will convert Canadian agricultural products into bio-based succinic acid, a value added building block chemical that is used in a wide variety of everyday products. BioAmber projects that over 90 per cent of the 30,000 mega-tonne annual capacity will be exported.