A BDO off-take agreement between Vinmar and BioAmber Inc.

An off-take agreement with Vinmar Intenational Vinmar is a major milestone for BioAmber in bringing its bio-based 1,4 butanediol (BDO) product to the marketplace

February 4, 2014
Last week, BioAmber Inc. (NYSE and EURONEXT Paris:  BIOA) and Vinmar International, Ltd. (Houston, TX) signed a take-or-pay contract for the purchasing of 100% of the BDO produced in a 100,000 ton per year capacity plant that BioAmber Inc. plans to build in North America and commission in 2017. Furthermore, Vinmar plans to invest in BioAmber Inc.’s first BDO plant to be located in the US.

“This partnership with Vinmar positions BioAmber Inc. to become a producer of bio-based 1,4 butanediol, a second platform chemical beyond succinic acid. We believe this take-or-pay contract will help us to secure significant project financing for our first commercial BDO plant. We expect to leverage this project financing, along with co-investment by Vinmar and other equity partners such as Mitsui & Co., to limit the cash BioAmber Inc. needs to contribute in order to be the Majority owner of the plant,” said Jean-Francois Huc, Chief Executive Officer of BioAmber Inc.

This agreement is particularly attractive to BioAmber Inc. because it guarantees that 100% of the output from the 100,000 ton per year plant will be sold for 15 years, and that the Vinmar partnership supports BDO technology’s progress and economic attractiveness. More importantly, this agreement represents a commercial foundation for large-scale BDO plants in addition to the Sarnia plant and that the off-take obligation and equity participation will facilitate the financing of the US planned BDO facility.

BDO is a building block chemical that is used in a wide range of products, including engineering plastics for the automotive industry, polyurethanes, biodegradable plastics and spandex. The current size of the global BDO market is approximately $4 billion. BioAmber Inc. produces its bio-based 1,4 butanediol by combining its succinic acid technology with a catalyst technology licensed from DuPont and the company believes its bio-based BDO is cost competitive with petroleum derived BDO. To date, BioAmber Inc. has validated the high quality of its bio-based BDO with over 20 purchasers of petroleum BDO.
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