BioAmber Signs Its First Succinic Acid Take-or-Pay Contract
Contract with PTT-MCC Biochem, a joint venture between Mitsubishi Chemical and PTT PCL
- Contract guarantees sales volume for Sarnia plant during its first three years of operation
- Agreement ensures BioAmber is the principal supplier to a key emerging buyer of succinic acid
- PTTMCC selection of BioAmber as supplier validates bio-succinic cost competitiveness and quality
MINNEAPOLIS, MN, May 1, 2014 /CNW/ - BioAmber Inc. (NYSE: BIOA), an industrial biotechnology company producing sustainable chemicals, today announced it has signed its first take-or-pay contract for succinic acid. Under the terms of the agreement, BioAmber will be the principal supplier of bio-succinic acid to PTTMCC Biochem for the production of a biodegradable plastic in Thailand.
PTTMCC Biochem Company Limited (PTTMCC) is a joint venture established by Mitsubishi Chemical Corporation, Japan's leading chemical company and PTT Public Company Limited, Thailand's largest oil and gas company. The joint venture will produce and sell polybutylene succinate (PBS), a biodegradable plastic made from succinic acid and 1,4 butanediol (BDO). PTTMCC is constructing a PBS plant in Rayong, Thailand that will have an annual production capacity of 20,000 tons. The PBS plant is expected to be operational in the first half of 2015 and will consume approximately 14,000 tons of succinic acid per year at full capacity.
BioAmber plans to supply PTTMCC from its 30,000 ton per year plant under construction in Sarnia, Canada. After the commissioning and start up periods for both plants in 2015, BioAmber will exclusively supply a minimum of 80% of PTTMCC's total bio-succinic acid needs until the end of 2017. The take-or-pay volumes committed by PTTMCC over the three-year term represent approximately half of the total annual quantity of bio-succinic acid that PTTMCC plans to purchase from BioAmber.
"This first succinic acid take-or-pay agreement is an important milestone for BioAmber," said Babette Pettersen, BioAmber's Chief Commercial Officer. "This contract guarantees significant sales volume for our Sarnia plant during its first three years of operation. PTTMCC is a major new buyer of bio-succinic acid and locking up this substantial volume commitment will strengthen our market leadership," she added.
About BioAmber Inc.
BioAmber (NYSE: BIOA) is an industrial biotechnology company producing sustainable chemicals. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstock into sustainable chemicals for use in a wide variety of everyday products including plastics, resins, food additives and personal care products. For more information visit www.bio-amber.com
About PTTMCC Biochem Limited
PTTMCC Biochem was established to develop and produce Polybutylene Succinate (PBS), a biodegradable plastic that is derived from sugar with a lower carbon footprint than conventional plastics. The company is a joint venture between PTT Public Company Limited of Thailand and Mitsubishi Chemical Corporation of Japan, with the shareholding proportion of 50% each. The company has its head office in Bangkok, and a plant is being built in Map Ta Phut, Rayong, Thailand.
This press release contains forward-looking statements, including statements related to the timing of the completion of our planned facility the timing of the PBS plant being constructed by PTMCC Biochem that may impact its obligations and its future projected succinic acid consumption, and our future market leadership position. All statements other than statements of historical fact contained in this press release are forward-looking statements. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "seek," "will," "may" or similar expressions. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond BioAmber's control. BioAmber's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in BioAmber's most recent registration statement on Form S-1 filed with the Securities and Exchange Commission, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the Company's limited operating history, the inability of the Company to execute on its manufacturing expansion strategy, including the construction of our planned facility in Sarnia, Ontario, the inability of the Company to comply with milestone covenants contained in certain of its agreements, the Company's limited sales of bio-succinic acid to date, the Company's inability to obtain additional financing, the Company's inability to leverage its bio-succinic acid technology to develop and commercialize derivatives of bio-succinic acid and other bio-based building block chemicals, and a decrease in demand for bio-succinic acid, bio-based 1,4 BDO and other bio-succinic acid derivatives. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the events and circumstances reflected in the forward-looking statements will be achieved or occur and the timing of events and circumstances and actual results could differ materially from those projected in the forward-looking statements. Accordingly, you should not place undue reliance on these forward-looking statements. All such statements speak only as of the date made, and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE BioAmber Inc.