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About $40 per share they’ll pay to cover, no wonder these guys post everyday!
Proof is coming in the form of Money in our accounts!!
Thanks biowin for being a lighthouse, keep ion shinning!!
Jealousy makes people do crazy things, I for one have my shares in my account sorry you lost out on this once in a lifetime opportunity!
BioAmber for the win $$$
Last July, BioAmber announced a stunning 210,000 ton per year take-or-pay contract for bio-based succinic acid with Vinmar International.
For a renewable chemicals project, it was literally “business-making” deal size. The Vinmar take-or-pay contract, together with the take-or-pay agreement signed in April 2014 with PTTMCC Biochem (a joint venture between Mitsubishi Chemical and PTT of Thailand), guaranteed the sale of 50% of the Sarnia plant capacity during the first three years of operation and 33% of plant capacity for the following 12 years.
It built upon a relationship between Vinmar and BioAmber that had been growing for some time, and broadened the scope of a previously announced 100,000 ton per year 1,4 butanediol (BDO) plant, which the parties currently plan to start up in late 2017. Under that agreement, following the financing, construction and commissioning of the BDO plant, Vinmar committed to purchase 100% of the BDO produced for 15 years.
Vinmar also committed to off-take 150,000 tons per year from a new, third plant following its financing, construction and commissioning. And Vinmar plans to invest at least 10% of the equity in this third plant, which BioAmber expects to start up in late 2020, based on the projected development of the succinic acid market.
That’s an awful lot of biobased succinic acid, and it made a lot of people ask, who exactly is Vinmar?
The short answer is that Vinmar Group is a congregate of three companies initially founded in 1978, with each operating independently yet in close association with the executive management team. Sales today are in the $5 billion range. And there’s a strategic equity arm, Goradia Capital, which combines substantial capital availability with the speed of an entrepreneurial company, combined with no outside investors or fund constraints.
To learn more about Vinmar, we went to the source — the company’s CEO and founder, Vijay Goradia, who spent time with us this week as we recorded a memorable interview, which follows.
BD: How did you start in the business?
VG: I came to this country in 1978, and started a polymers distribution business out of New York City. When I started, I had no money, no contacts, and no benefactor. I started distributing polymers into South Asia and onto the Middle East then Africa. Then we grew over the years into many markets.
BD: Why did you turn to this sector?
VG: My family in India had been in the polymer conversion business making plastic products for many years. I had had a little exposure to that when going to school and worked then for my Dad and then I started my own company in polymer conversion.
I came to this country really to study music, and I tried to get a scholarship and but that didn’t work, turned out I wasn’t that good a musician. At the time I didn’t have money to rent an apartment. I had a lot of time, and I was living in a friend’s apartment. So, I started making phone calls.
BD: Then it started taking off.
VG: Over time we kept adding more polymers, then the building blocks — aromatics, olefins and then the intermediate chemicals. It was a natural progression. I started with South Asia first, in those days, some large US producers, did not see the markets as their core markets. They were happy to use intermediaries like themselves. When they saw us doing a good job for them, they asked if we would expand our geography that was non-core to them. We said sure.
We took on a number of countries, and then many set up production facilities in other countries – they started supplying product to us from those countries. Many of these polymer producers also produced chemicals business and they asked if we could sell their chemicals. We were happy to do so. As their capacities grew, we kept growing.
BD: How did it work, then?
VG: Essentially, we represented (still do) US companies as their marketing extension in the emerging markets — and China, then, was just emerging. We did it in a transparent manner, where the producers knew exactly where we were shipping and to whom we were selling. To a producer, it was almost an FOB plant sale. We would take on credit risk, market risk, and do it all in a very cost effective manner. So, the producer didn’t have to replicate these functions.
BD: As many of them expanded, they started building plants in emerging markets themselves, especially in Asia. How did that impact you?
VG: To be frank, what we found in many emerging markets – as local producers emerged and local and regional production expanded, that local production actually spurred even greater consumption. Over the last 40 odd years, we’ve seen the consumption in emerging markets rose as much as twice the GDP rate. So, as they built their own plants, for base polymers and chemicals, the production rose very quickly and they still had to keep importing. In that sense, it was an opportunity.
Also, in many of these countries in emerging areas, they started out using simple basic commodity materials, making shopping bags and so on, but over time they became more sophisticated, using better stuff whether it was for longer shelf life or better durability and so on.
And so we saw that progression taking place. As a result, if we lost on base or commodity polymers, we made up for it with more value-added polymers and chemicals.
BD: What are sales today?
VG: Last year, sales were close to $5B. We do business in over 110 countries. But we do it in a low profile way, we don’t brag about it.
BD: How did you become interested in renewables?
VG: Over the years, we have been tracking what’s going on the sector. At one stage, we invested in a biodiesel plant in Indonesia. The business didn’t do well.
There’s a definitely a future for Biofuels. But there’s an even better future for chemicals and polymers, provided that the companies do not focus on anything that is consumed by human beings. In that case, there’s a lot of price volatility and the cost might not be sustainable.
BD: Did you see an opportunity to replicate your model, as sustainable molecules came along?
VG: Over the last few years we have been in contact with a number of companies, primarily the US, and have had discussions. A few things came to the fore. One was that most companies are independents, not part of a very large conglomerate or a very large established company. These independents are very good at developing molecules and technologies, but very few have experience in commercialization.
So when ready to commercialize, they hire a few marketing and business development guys. They may have had the background to develop a marketing strategy, but they work with a limited number of large US, European and maybe Japanese users, so these independents are generally at the mercy of these suppliers. Their marketing policies revolve around satisfying the needs of the large users. Now typically, these large companies hedge their bets, they are very deliberate and slow and sometimes string more than one company along.
BD: And financing is a problem for them, too.
VG: When it’s time to commercialize and scale up — both equity and debt, as you know, there’s not a lot of money available to fund the debt. Whatever is available, the equity investor and the lender want to know who will buy the product and how long it will take to sell out the whole plant.
That’s where we come into the picture. We expand the reach beyond 2-3 geographies and a hand full of customers, and we shorten the whole commercialization phase. And we undertake to offtake the whole production for at least the whole of the loan period, which is usually 7-10 years. Now the company can focus on their core competencies, to keep improving the technology, production and reducing the cost.
BD: But you bring other assets to a partner.
VG: We also have a project group, that consists of people like Terry Reynolds. Project guys, who have a deep understanding of how to select an EPC contractor, how to negotiate EPC contracts, how to cut down on the time period and the cost, and also in negotiating with other service providers such as utilities. We don’t do this as a consultant, charging fees. We offer all this including help with raising finance.
We only make money when the plant starts up commercially, and then we market their product. In doing so, the company gets an unbiased, unvarnished assistance. We don’t have any preference in terms of an EPC contact service provider or lender. We offer all these services, and selectively offer to take equity in these companies when they are commercially ready to scale up.
BD: For now, your focus is on late stage renewable chemical companies?
VG: Biofuels is not something we want to focus on. We also don’t focus on companies still perfecting their technology and do not have at least a demo plant. We don’t bring value to them at that stage. We bring it once they have demonstrated their technology and economic viability on a demo plant and are now ready to scale up.
BD: How strong is the demand for renewable chemicals?
VG: Obviously our customers, especially in North America and Europe were starting to take notice, but it wasn’t groundswell of demand. But having been long enough in the business, our team felt that things were moving rapidly enough that at some stage it would reach an inflection point. We like to stay ahead of the game, by getting involved early on.
BD: To what extent are companies looking to address cost volatility with renewables, and to what extent to reduce their carbon footprint?
VG: Whether it’s a Walmart or P&G, they are looking for what I call the 4 P’s, Performance, Price, Public Relations and Politically correct.
BD: Is that the same in all countries? How has the view changed, if at all, with lower oil prices?
VG: Developed countries are obviously ahead of the game. Emerging markets are usually 3 to 7 years behind the developed countries in adopting change, American, European, and Japanese customers usually take the lead in these initiatives, especially our European customers. The current crude oil price has certainly dampened their appetite for renewable. But that means they are slowing down a bit, they are more cautious. But there is a general feeling that oil prices will rise and stabilize between 70 and 80 dollars in a year or so. And at those levels some companies and some bio-renewable will be affordable.
BD: Vinmar has become well known in the renewables world with the BioAmber deal, where you contracted for offtakes for succininc acid from several plants. Is that the model you’ll pursue elsewhere?
VG: BioAmber, that’s certainly the model we are pursuing and would like to pursue. We are currently in discussion with a couple of companies. We want to be doing more, and figure out a way to do more. BioAmber — that’s the model we would like to pursue.
BD: What do you see as the challenges moving forward?
VG: I guess we have at least 2 or 3 challenges moving forward in this space.
One is to decide on which of the different chemicals and polymers we want to pursue, which are the base molecules we ought to look at.
Another challenge is to try to figure out which companies have the best chance of succeeding. For example, in the bio succinic space there are least five other players at different stages of development, and we’ve talked with three and had detailed discussions, and we selected the one that we felt had the best prospects. Not to say others won’t make it, but we felt BioAmber had the best prospects.
Third, understanding where they are in their evolution. We don’t provide much value in the research and development phase. Once they have a demo plant and can scale up, that’s the right time for us.
Ha
Organic Acids for Feed Market to Witness Astonishing Growth during Forecast 2028 with Top Leading players like ADM, BASF SE, BP Plc, BioAmber Inc., Cargill, Incorporated, Celanese Corporation, Corbion NV, DOW, Du Pont De, Eastman Chemicals Company, Elekeiroz S.A
ByCDN NewswirePublishedFebruary 3, 2022
Global Organic Acids for Feed Industry Report 2022 is a professional and in-depth survey on the current state of the Organic Acids for Feed Market. The report provides a basic overview of the industry including definitions, classifications, applications and industry chain structure. The Organic Acids for Feed Market analysis is provided for the international market including development history, competitive landscape analysis, and major regions’ development status.
Download Sample Copy of this Report @ https://www.databridgemarketresearch.com/request-a-sample/?dbmr=global-organic-acids-for-feed-market
The organic acid for feed market is expected to witness market growth at a rate of 4.5% in the forecast period of 2021 to 2028 and is expected to reach USD 5.26 billion by 2028. Data Bridge Market Research report on organic acid for feed market provides analysis and insights regarding the various factors expected to be prevalent throughout the forecast period while providing their impacts on the market’s growth. The rise in disposable incomes is escalating the growth of organic acid for the feed market.
The Major Organic Acids for Feed Market Players: ADM, BASF SE, BP Plc, BioAmber Inc., Cargill, Incorporated, Celanese Corporation, Corbion NV, DOW, Du Pont De, Eastman Chemicals Company, Elekeiroz S.A, Feichang acid chemicals Co., Ltd., Fuso chemical co. Ltd, Henan Jindan Lactic Acid Technology Co., Ltd., Jiangsu SOPO (Group) Co., Ltd, Jungbunzlauer Suisse AG
The points discussed in the report are the major market players involved in the market such as manufacturers, raw material suppliers, equipment suppliers, end users, traders, distributors etc. The full profile of the companies is mentioned. And the market size, capacity, production, price, revenue, cost, gross margin, sales volume, revenue, consumption, growth rate, import, export, supply, future strategies and the technological developments they make are also included in the report.
The report also includes the profiles of the leading companies in the SSD drive market along with their SWOT analysis and market strategies. Further, the report focuses on major industry players with information such as company profiles, components and services offered, past 3 years financial information, key developments over the past five years. .
The segments and subsections of the Organic Acids for Feed market are presented below:
By Type (Acetic Acid, Citric Acid, Formic Acid, Lactic Acid, Malic Acid, Succinic Acid, Gluconic Acid, Ascorbic Acid, Fumaric Acid, Propionic Acid, And Others)
Livestock (Poultry, Ruminants, Swine, Aquatic Animals And Others)
Organic Acids for Feed is a tool used to deliver internal top-down communications like blogs, newsletters, news feeds, and updates across a business. This software allows organization leaders to segment communications by factors like department, position, and location. The employee communications software helps companies to communicate effectively with their entire workforce, corporate, and frontline. It also increases profitability and staff retention rates through better goal and vision alignment and improves employee productivity and experience. All the above factor is significantly impacting on the growth of the Organic Acids for Feed market.
Impact of COVID-19 Pandemic on Organic Acids for Feed Market
The COVID-19 outbreak, which began in Wuhan (China) during December 2019, has spread at a fast pace worldwide. The global factory shutdowns, travel bans, and border lockdowns, to combat and contain the outbreak, have impacted every industry and economy worldwide. The majority of the manufacturing plants are either temporarily shut or operating with minimum staff; due to which the Organic Acids for Feed and related components are disrupted.
Further, in the research report, the following points are included along with an in-depth study of each point:
* Production Analysis– Production is analyzed with respect to different regions, types, and applications. Here, the price analysis of various Market key players is also covered.
* Sales and Revenue Analysis– Both, sales and revenue are studied for the different regions of the global market. Another major aspect, price, which plays an important part in the revenue generation, is also assessed in this section for the various regions.
* Supply and Consumption– In continuation of sales, this section studies the supply and consumption of the Market. This part also sheds light on the gap between supply and consumption. Import and export figures are also given in this part.
* Other analyses– Apart from the information, trade and distribution analysis for the Market, contact information of major manufacturers, suppliers and key consumers are also given. Also, SWOT analysis for new projects and feasibility analysis for new investment are included.
Place a direct order for this report @ https://www.databridgemarketresearch.com/inquire-before-buying/?dbmr=global-organic-acids-for-feed-market
Main key points of the Solid State Drive (SSD) market
Solid State Drives Market Overview Competition in the Solid State Drives (SSD) market Solid State Drive (SSD) Market, Revenue and Price Trend SSD Market Analysis by Application Company Profiles and Key Figures of the Solid State Drive (SSD) Market Market dynamics Methodology and data source
Regional Outlook:
The report provides a detailed overview of the industry including both qualitative and quantitative information. It provides overview and forecast of the global Organic Acids for Feed market based on various segments. It also provides market size and forecast estimates from year 2017 to 2027 with respect to five major regions, namely; North America, Europe, Asia-Pacific (APAC), Middle East and Africa (MEA) and South America. The Organic Acids for Feed market by each region is later sub-segmented by respective countries and segments. The report covers analysis and forecast of 18 countries globally along with current trend and opportunities prevailing in the region.
Table of Contents:
1 Organic Acids for Feed Market – Research Scope
2 Organic Acids for Feed Market – Research Methodology
3 Organic Acids for Feed Market Forces
4 Organic Acids for Feed Market – By Geography
5 Organic Acids for Feed Market – By Trade Statistics
6 Organic Acids for Feed Market – By Type
7 Organic Acids for Feed Market – By Application
8 North America Organic Acids for Feed Market
9 Europe Organic Acids for Feed Market Analysis
10 Asia-Pacific Organic Acids for Feed Market Analysis
11 Middle East and Africa Organic Acids for Feed Market Analysis
12 South America Organic Acids for Feed Market Analysis
13 Company Profiles
Black you black
World changing technologies and we all work together for the change!
Thankful we are partners with these guys!!
In the Netherlands, Reverdia and BioAmber have inked a non-assert agreement concerning Reverdia’s Biosuccinium technology. BioAmber Inc. and Reverdia are both involved in the production and commercialization of bio-based succinic acid using their own unique proprietary yeast-based technologies.
Pursuant to the key provisions of this agreement, BioAmber will benefit from non-assertion covenants with respect to certain intellectual property rights of Reverdia in the field of bio-based succinic acid, in exchange for undisclosed financial consideration. Furthermore, the agreement provides comfort to both BioAmber and Reverdia to continue the implementation of their respective businesses using their own unique, proprietary yeast-based technologies.
“In today’s increasingly complex intellectual property environment, the conclusion of this agreement illustrates how two proactive companies operating in the same field can find a constructive solution that allows them to focus on the execution of their respective business plans rather than seeking confrontation and conflict,” said Jean Francois Huc, BioAmber’s Chief Executive Officer. “It allows BioAmber to eliminate the risk of litigation and uncertainty at a predictable cost,” he added.
”This Agreement demonstrates that Reverdia’s Biosuccinium™ low pH yeast technology is a leading technology in the field of bio-based succinic acid and that by working with partners in the industry, we will speed up the adoption of bio-based materials and validate bio-based succinic acid as a key building block for the bio-based economy,” said Marcel Lubben, Reverdia’s President. “It is our belief that the yeast-based technologies have a significant competitive advantage over bacterial-based technologies for the production of bio-based succinic acid,” he added.
The Digest’s Take
We agree with both companies that the market for succinic acid will benefit from having strong players able to deliver on the rapidly growing demand in bio-plastics, polyurethanes, solvents, coatings and other applications.
Further, it is a delight to see potential disputes turn into agreements before the financial resources of companies are drained — resources better utilized in deployment. In the end, only the short-sellers benefit from the uncertainty that litigation brings.
BioAmber and Vinmar also broadened the scope of their
previously announced 100,000-ton per year 1,4 butanediol (BDO) plant, which the
parties currently plan to start up in late 2017. Under that agreement,
following the financing, construction and commissioning of the BDO plant,
Vinmar has committed to purchase and BioAmber has committed to sell 100% of the
BDO produced for 15 years. As part of the new succinic acid master off-take
agreement, this second plant will be expanded to an annual capacity of 100,000
tons of bio-BDO and 70,000 tons of bio-succinic acid. Vinmar plans to make a
10% or greater equity investment in the expanded plant and has committed to
off-take and BioAmber has committed to sell a minimum of 50,000 tons per year
of bio-succinic acid for 15 years following the plant's start-up date. Vinmar
also has the option to secure additional bio-succinic acid tonnage under the
take-or-pay contract if BioAmber has not committed the remaining volume at the
time the plant's financing is secured.
BioAmber, using patented technology, has had its bio-chemical made in France for several years and already has an international clientele.
So your annoyed that I post old information, but you continue to post on a company board that’s apparently dead for 4 years?
Stupid is as stupid does!
Answer the easy question do you any of you have experience dealing with Spacs, bankruptcy, or liquidations?
Please provide us with your experience.
PTTMCC Biochem (PTTMCC), a joint venture between PTT PLC and Mitsubishi Chemical, has selected BioAmber Inc. as its partner for a polybutylene succinate (PBS) plant that will begin construction in Thailand in 2012. BioAmber will build a biobased succinic acid plant in Thailand and supply PTTMCC with biobased succinic acid on an exclusive basis. Succinic acid is the principal starting material for the production of PBS, along with 1,4-butanediol.
PTTMCC plans to take an interest in BioAmber’s succinic acid plant and secure off-take for a portion of the plant’s capacity. The plant will be built in proximity to PTTMCC’s PBS plant, and both plants are expected to come online in 2014. After evaluating the various biosuccinic acid technologies, PTTMCC concluded that BioAmber’s platform offered the lowest cost biosuccinic acid and the lowest technology risk. By securing BioAmber’s cost competitive succinic acid, PTTMCC expects to drive down the manufacturing cost of biobased PBS, a renewable, biodegradable polymer that has significant growth potential and strong patent protection thanks to a recently issued Mitsubishi Chemical patent.
The partners have begun a feasibility study to determine the exact location of the succinic acid plant, which could be built next to the PBS plant at the Map Ta Phut site in Rayong. At peak capacity BioAmber expects to produce 65,000 MT of succinic acid on the site. BioAmber also plans to produce 50,000 MT of biobased 1,4-butanediol on site, using its technology licensed exclusively from DuPont to convert biobased succinic acid directly to 1,4-butanediol in an integrated process. PTTMCC will help BioAmber secure biomass for the plant, which will initially source sugar from cane and/or tapioca, and subsequently biomass sugars.
“BioAmber operates the world’s only large-scale biobased succinic acid plant and is already Mitsubishi Chemical’s sole supplier of biobased succinic acid. BioAmber has proven the quality and cost of its biosuccinic acid and we have been working together for a number of months to further improve the technology,'” said Shigeru Handa, General Manager of Mitsubishi Chemical’s Sustainable Resources Business Development Department and a member of the PTTMCC board of directors. “Partnering with BioAmber will allow PTTMCC to have competitive biosuccinic acid from a local source by 2014,” he added.
“Securing the lowest cost succinic acid was a priority for PTTMCC,” said Worawat Pitayasiri, Managing Director of PTTMCC. “BioAmber’s commitment to building a large-scale plant in Thailand will benefit our company and represents a major investment in Thailand by a leading US-based renewable chemicals company,” he added.
“This partnership is a testament to our market leadership in succinic acid. We are proud that PTTMCC Biochem has chosen BioAmber as the succinic acid supplier for its PBS venture,” added Jean-Francois Huc, CEO of BioAmber. “With its strong patent portfolio, PTTMCC Biochem is poised to be the dominant player in biobased PBS and this partnership gives BioAmber a strong position in a fast growing segment of the biosuccinic acid market,” he added.
About BioAmber Inc.
BioAmber, a renewable chemistry company, is the market leader in the development and commercialization of biobased succinic acid and derivatives including modified PBS, a biodegradable plastic offering better heat resistance and processability than other biopolymers. BioAmber operates the world’s only large-scale biobased succinic acid plant and has partnerships with market leaders including Cargill, DuPont Applied Biosciences, Mitsui & Co., Mitsubishi Chemical and PTTMCC Biochem. BioAmber is also leveraging its succinic acid experience and know-how to develop a biobased adipic acid platform. The company has offices and research labs in Minneapolis, MN, an office in Montreal, a sales office in Shanghai, China and a production plant in Pomacle, France. For more information, see www.bio-amber.com.
About PTT MCC Biochem Company Limited
PTT MCC Biochem was established to develop and produce Polybutylene Succinate or 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 (PTT) of Thailand and Mitsubishi Chemical Corporation (MCC) of Japan with the shareholding proportion of 50% each. The company has the head office in Bangkok, and the plant site is expected to be in Map Ta Phut, Rayong, Thailand.
Korea, BioAmber and CJ CheilJedang Corporation signed a LOI for a joint venture in China to produce up to 36,000 metric tons of bio-succinic acid per year.
It’s not a greenfield. The CJCJ JV involves a retrofit of an existing fermentation plant in a market that BioAmber cannot readily penetrate today.
How is BioAmber able to convert this plant? It comes down to a low pH yeast, which allows us to leverage CJCJ’s existing fermenters and purification equipment. The retrofit will allow the partners to bring this capacity on line quickly, cost effectively and with no capital investment by BIOA.
The goal is to competitively produce bio-succinic acid in China and quickly penetrate the world’s largest succinic acid market. This can be achieved rapidly, cost effectively and with limited capital investment by retrofitting an existing CJCJ fermentation facility with BioAmber’s succinic acid technology. CJCJ would incur all capital costs required to retrofit their fermentation facility, including the capital needed during plant commissioning and startup, and production would begin in Q1 2018. If market demand were to subsequently exceed production capacity, the joint venture could expand production through debottlenecking and/or additional investment. The partners would also have a mutual right-of-first-refusal to retrofit additional CJCJ fermentation facilities globally.
The CJCJ background
CJCJ produces fermentation-based products such as feed amino acids, monosodium glutamate and nucleotides, with global manufacturing and business operations in six continents.
CJCJ would own 65% of the JV and BioAmber would own 35%. The JV would pay BioAmber a technology royalty for having access to BioAmber’s proven bio-succinic acid technology, and would pay CJCJ a tolling fee for producing bio-succinic acid on behalf of the JV. Both partners would be entitled to a share of the profits equal to their respective equity ownership positions.
The BioAmber strategy
Clearly, opportunities for BioAmber continue to emerge and the CJ announcement is a great example of this. A large commercial plant operating in Sarnia enables BioAmber to demonstrate that our technology and our cost of goods are compelling. This is attracting large strategic players who recognize the long term value of our innovative, disruptive biotechnology platform.
As we noted in our 2014 report: Why are all the traffic lights turning green for BioAmber?”
“BioAmber is avowedly pursuing a strategy based in careful aggregation of strategic partners that bring investment and offtake as well as financing relationships, while building further applications for their molecules in work with R&D partners that could be expected to translate into commercial partners down the line. Which is to say, starting with an economically and environmentally advantaged molecule and then working in partnership with downstream customers to establish markets for that molecule.
“It’s very different than the conventional biobased fuels strategy, which has been to set mandates to create market certainty, and use that to create a favorable financing environment, and encourage engagement with incumbents.”
How it all comes together
“With regards to timing, we don’t see these various projects overlapping,” BioAmber EVP Mike Hartman told The Digest. “Sarnia is in production and ramping up today. The CJ joint venture is specifically to serve the China and broader Asian market, and will come on line in Q1 2018. This will be incremental sales and cash flow that we would not likely generate if trying to import Sarnia production into China. Our second North American plant, which will expand our product portfolio to include BDO and THF, is expected to achieve a financial close at the end of 2017 and begin production in late 2019 or early 2020. CJ will take the lead in building and producing in China on behalf of the JV, which will allow our team to focus on the second plant in the US or Canada.
“The royalty and earnings stream we will start to receive from the JV in 2018 will be on top of Sarnia’s contribution, and will come with no additional capital investment. This is significant, as is the fact that we could retrofit further CJCJ fermentation capacity in the future.”
The caveats
The proposed joint venture is subject to certain conditions, including technical and commercial due diligence, with the definitive agreements expected to be signed by July 2017. As part of the letter of intent, BioAmber will be selling CJCJ bio-succinic acid manufactured at its Sarnia, Ontario plant, so that CJCJ can undertake market development in China and South Korea in the first half of 2017.
The BioAmber biobased business case
As we wrote earlier this year in “No Pain, No Gain”:
Leading the succinic charge has been BioAmber, which concluded a successful IPO and is making and shipping succinic acid out of Sarnia, Ontario. To date, sales have been at the “emerging company level”, reaching $1.1M for Q4 , including initial shipments to PTTMCC Biochem, an important off-taker requiring high purity succinic acid to make bioplastic. However, more than 100 companies tested and qualified the bio-succinic acid produced in Sarnia, and in recent weeks Mitsui & Co. invested $CDN25 million in the Sarnia joint venture, increasing its equity stake from 30% to 40% and committing to play a bigger role in commercialization.
Investors have been encouraged by an average selling price for Q4 2015 above the $2,000 / MT guidance, despite low oil prices. Overall, 2015 revenues were up to $2.2M from $1.5M in 2014, and net loss for the year narrowed to $37.2M from $48.5M in 2014. R&D costs have increased to $20.3 million from $15.2 million in 2015, driven primarily by an increase in expenses related to the commissioning and start-up of the Sarnia plant.
The company’s first commercial plant opened in August at a cost of $141.5M, and volumes specified in signed take-or-pay and sales agreements exceed annual production capacity. Should the company be able to maintain a $2,000 per ton price and reach nameplate capacity of 30,000 tons at Sarnia — well, it’s not hard to get out a calculator and reach $60M in annual revenues. 2016 could well be a mighty year as the company begins to ramp up production.
The 5 Big Trends at BioAmber
We wrote about these in “When amber means caution but BioAmber means go,” here
What about Mitsui and Vinmar?
Let’s not forgt the Mitsui and Vinmar relationships.
Mitsui. As we reported in February, Mitsui this year invested an additional C$25 million in the BioAmber joint venture for 10% of the equity, increasing its stake from 30% to 40%. Mitsui said at the time it would also play a stronger role in the commercialization of bio-succinic acid produced in Sarnia, providing dedicated resources alongside BioAmber’s commercial team. BioAmber will maintain a 60% controlling stake in the joint venture.
Bioamber and Mitsui also said they would ultimately jointly build and operate two additional facilities that, together with Sarnia, will have a total cumulative capacity of 165,000 tons of succinic acid and 123,000 tons of BDO.
BioAmber’s Sarnia joint venture with Mitsui & Co. Ltd. began shipping bio-succinic acid to customers in October 2015 and is operating its manufacturing process at commercial-scale. Management expects the Sarnia plant to increase production volumes progressively to reach full capacity in 2017.
Vinmar. As we reported in 2014, BioAmber signed a 210,000 ton per year take-or-pay contract for bio-based succinic acid with Vinmar International. Under the terms of the 15-year agreement, Vinmar committed to purchase and BioAmber Sarnia committed to sell 10,000 tons of succinic acid per year from the 30,000 ton per year capacity plant that was at that time under construction in Sarnia, Canada.
As part of that succinic acid master off-take agreement, this second plant was set be expanded to an annual capacity of 100,000 tons of bio-BDO and 70,000 tons of bio-succinic acid. Vinmar will make a 10% or greater equity investment in the expanded plant and has committed to off-take and BioAmber has committed to sell a minimum of 50,000 tons per year of bio-succinic acid for 15 years following the plant’s start-up date. Vinmar also has the option to secure additional bio-succinic acid tonnage under the take-or-pay contract if BioAmber has not committed the remaining volume at the time the plant’s financing is secured.
Reaction from the stakeholders
“While we remain focused on ramping up our Sarnia plant and building a second plant in North America, this JV is an opportunity for BioAmber to accelerate the deployment of its bio-succinic acid technology on a global scale without capital investment,” stated Jean-Francois Huc, BioAmber’s CEO. “This joint venture would allow us to quickly penetrate the Chinese and broader Asian market and accelerate cash flow and earnings for our shareholders. It would also serve as a blueprint for the build-out of additional bio-succinic acid production with very limited capital investment.”
“This JV is an opportunity for CJCJ to leverage BioAmber’s unique, low pH yeast technology and utilize our existing fermentation assets more effectively in order to competitively supply the growing market for bio-succinic acid in Asia,” added Dr. Hang Duk Roh, Head of CJ CheilJedang BIO.
Fabrice Orecchioni, BioAmber’s COO, added: “CJCJ has visited our Sarnia facility and we have visited their intended plant in China. Both partners are confident that the China plant can be reconfigured to quickly produce bio-succinic acid, for a fraction of what it cost us to build our Sarnia facility.”
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Governments are going carbon negative, petroleum plastics are being band, oils at an all time high…
Seems like the stage is set for something big!
Last July, BioAmber announced a stunning 210,000 ton per year take-or-pay contract for bio-based succinic acid with Vinmar International.
For a renewable chemicals project, it was literally “business-making” deal size. The Vinmar take-or-pay contract, together with the take-or-pay agreement signed in April 2014 with PTTMCC Biochem (a joint venture between Mitsubishi Chemical and PTT of Thailand), guaranteed the sale of 50% of the Sarnia plant capacity during the first three years of operation and 33% of plant capacity for the following 12 years.
It built upon a relationship between Vinmar and BioAmber that had been growing for some time, and broadened the scope of a previously announced 100,000 ton per year 1,4 butanediol (BDO) plant, which the parties currently plan to start up in late 2017. Under that agreement, following the financing, construction and commissioning of the BDO plant, Vinmar committed to purchase 100% of the BDO produced for 15 years.
Vinmar also committed to off-take 150,000 tons per year from a new, third plant following its financing, construction and commissioning. And Vinmar plans to invest at least 10% of the equity in this third plant, which BioAmber expects to start up in late 2020, based on the projected development of the succinic acid market.
That’s an awful lot of biobased succinic acid, and it made a lot of people ask, who exactly is Vinmar?
The short answer is that Vinmar Group is a congregate of three companies initially founded in 1978, with each operating independently yet in close association with the executive management team. Sales today are in the $5 billion range. And there’s a strategic equity arm, Goradia Capital, which combines substantial capital availability with the speed of an entrepreneurial company, combined with no outside investors or fund constraints.
To learn more about Vinmar, we went to the source — the company’s CEO and founder, Vijay Goradia, who spent time with us this week as we recorded a memorable interview, which follows.
BD: How did you start in the business?
VG: I came to this country in 1978, and started a polymers distribution business out of New York City. When I started, I had no money, no contacts, and no benefactor. I started distributing polymers into South Asia and onto the Middle East then Africa. Then we grew over the years into many markets.
BD: Why did you turn to this sector?
VG: My family in India had been in the polymer conversion business making plastic products for many years. I had had a little exposure to that when going to school and worked then for my Dad and then I started my own company in polymer conversion.
I came to this country really to study music, and I tried to get a scholarship and but that didn’t work, turned out I wasn’t that good a musician. At the time I didn’t have money to rent an apartment. I had a lot of time, and I was living in a friend’s apartment. So, I started making phone calls.
BD: Then it started taking off.
VG: Over time we kept adding more polymers, then the building blocks — aromatics, olefins and then the intermediate chemicals. It was a natural progression. I started with South Asia first, in those days, some large US producers, did not see the markets as their core markets. They were happy to use intermediaries like themselves. When they saw us doing a good job for them, they asked if we would expand our geography that was non-core to them. We said sure.
We took on a number of countries, and then many set up production facilities in other countries – they started supplying product to us from those countries. Many of these polymer producers also produced chemicals business and they asked if we could sell their chemicals. We were happy to do so. As their capacities grew, we kept growing.
BD: How did it work, then?
VG: Essentially, we represented (still do) US companies as their marketing extension in the emerging markets — and China, then, was just emerging. We did it in a transparent manner, where the producers knew exactly where we were shipping and to whom we were selling. To a producer, it was almost an FOB plant sale. We would take on credit risk, market risk, and do it all in a very cost effective manner. So, the producer didn’t have to replicate these functions.
BD: As many of them expanded, they started building plants in emerging markets themselves, especially in Asia. How did that impact you?
VG: To be frank, what we found in many emerging markets – as local producers emerged and local and regional production expanded, that local production actually spurred even greater consumption. Over the last 40 odd years, we’ve seen the consumption in emerging markets rose as much as twice the GDP rate. So, as they built their own plants, for base polymers and chemicals, the production rose very quickly and they still had to keep importing. In that sense, it was an opportunity.
Also, in many of these countries in emerging areas, they started out using simple basic commodity materials, making shopping bags and so on, but over time they became more sophisticated, using better stuff whether it was for longer shelf life or better durability and so on.
And so we saw that progression taking place. As a result, if we lost on base or commodity polymers, we made up for it with more value-added polymers and chemicals.
BD: What are sales today?
VG: Last year, sales were close to $5B. We do business in over 110 countries. But we do it in a low profile way, we don’t brag about it.
BD: How did you become interested in renewables?
VG: Over the years, we have been tracking what’s going on the sector. At one stage, we invested in a biodiesel plant in Indonesia. The business didn’t do well.
There’s a definitely a future for Biofuels. But there’s an even better future for chemicals and polymers, provided that the companies do not focus on anything that is consumed by human beings. In that case, there’s a lot of price volatility and the cost might not be sustainable.
BD: Did you see an opportunity to replicate your model, as sustainable molecules came along?
VG: Over the last few years we have been in contact with a number of companies, primarily the US, and have had discussions. A few things came to the fore. One was that most companies are independents, not part of a very large conglomerate or a very large established company. These independents are very good at developing molecules and technologies, but very few have experience in commercialization.
So when ready to commercialize, they hire a few marketing and business development guys. They may have had the background to develop a marketing strategy, but they work with a limited number of large US, European and maybe Japanese users, so these independents are generally at the mercy of these suppliers. Their marketing policies revolve around satisfying the needs of the large users. Now typically, these large companies hedge their bets, they are very deliberate and slow and sometimes string more than one company along.
BD: And financing is a problem for them, too.
VG: When it’s time to commercialize and scale up — both equity and debt, as you know, there’s not a lot of money available to fund the debt. Whatever is available, the equity investor and the lender want to know who will buy the product and how long it will take to sell out the whole plant.
That’s where we come into the picture. We expand the reach beyond 2-3 geographies and a hand full of customers, and we shorten the whole commercialization phase. And we undertake to offtake the whole production for at least the whole of the loan period, which is usually 7-10 years. Now the company can focus on their core competencies, to keep improving the technology, production and reducing the cost.
BD: But you bring other assets to a partner.
VG: We also have a project group, that consists of people like Terry Reynolds. Project guys, who have a deep understanding of how to select an EPC contractor, how to negotiate EPC contracts, how to cut down on the time period and the cost, and also in negotiating with other service providers such as utilities. We don’t do this as a consultant, charging fees. We offer all this including help with raising finance.
We only make money when the plant starts up commercially, and then we market their product. In doing so, the company gets an unbiased, unvarnished assistance. We don’t have any preference in terms of an EPC contact service provider or lender. We offer all these services, and selectively offer to take equity in these companies when they are commercially ready to scale up.
BD: For now, your focus is on late stage renewable chemical companies?
VG: Biofuels is not something we want to focus on. We also don’t focus on companies still perfecting their technology and do not have at least a demo plant. We don’t bring value to them at that stage. We bring it once they have demonstrated their technology and economic viability on a demo plant and are now ready to scale up.
BD: How strong is the demand for renewable chemicals?
VG: Obviously our customers, especially in North America and Europe were starting to take notice, but it wasn’t groundswell of demand. But having been long enough in the business, our team felt that things were moving rapidly enough that at some stage it would reach an inflection point. We like to stay ahead of the game, by getting involved early on.
BD: To what extent are companies looking to address cost volatility with renewables, and to what extent to reduce their carbon footprint?
VG: Whether it’s a Walmart or P&G, they are looking for what I call the 4 P’s, Performance, Price, Public Relations and Politically correct.
BD: Is that the same in all countries? How has the view changed, if at all, with lower oil prices?
VG: Developed countries are obviously ahead of the game. Emerging markets are usually 3 to 7 years behind the developed countries in adopting change, American, European, and Japanese customers usually take the lead in these initiatives, especially our European customers. The current crude oil price has certainly dampened their appetite for renewable. But that means they are slowing down a bit, they are more cautious. But there is a general feeling that oil prices will rise and stabilize between 70 and 80 dollars in a year or so. And at those levels some companies and some bio-renewable will be affordable.
BD: Vinmar has become well known in the renewables world with the BioAmber deal, where you contracted for offtakes for succininc acid from several plants. Is that the model you’ll pursue elsewhere?
VG: BioAmber, that’s certainly the model we are pursuing and would like to pursue. We are currently in discussion with a couple of companies. We want to be doing more, and figure out a way to do more. BioAmber — that’s the model we would like to pursue.
BD: What do you see as the challenges moving forward?
VG: I guess we have at least 2 or 3 challenges moving forward in this space.
One is to decide on which of the different chemicals and polymers we want to pursue, which are the base molecules we ought to look at.
Another challenge is to try to figure out which companies have the best chance of succeeding. For example, in the bio succinic space there are least five other players at different stages of development, and we’ve talked with three and had detailed discussions, and we selected the one that we felt had the best prospects. Not to say others won’t make it, but we felt BioAmber had the best prospects.
Third, understanding where they are in their evolution. We don’t provide much value in the research and development phase. Once they have a demo plant and can scale up, that’s the right time for us.
Big news coming hold your shares!
It’s almost time!!
So I asked all of you what would happen if you took the tax right off for your shares on a company that went bankrupt, and if you could ever get your shares back if the company made a comeback.
I got a private massage that states below.
A Special Case: Bankrupt Companies
If you own stock that has become worthless because the company went bankrupt and was liquidated, then you can take a total capital loss on the stock.9 However, the IRS wants to know on what basis the value of the stock was determined as zero or worthless. Therefore, you should keep some kind of documentation of the zero value of the stock, as well as documentation of when it became worthless.
Basically, any documentation that shows the impossibility of the stock offering any positive return is sufficient. Acceptable documentation shows the nonexistence of the company, canceled stock certificates, or evidence the stock is no longer traded anywhere. Some companies that go bankrupt allow you to sell them back their stock for a penny. This proves you have no further equity interest in the company and documents what is essentially a total loss.
So this seem to be the narrative for some on this board.
They want us to show documentation to the IRS that it’s impossible for a positive return of the company…. Hmmm
And some companies will let you sell your shares back to the company for a penny proving you have no further equity in the company…hmmm so is bioamber trying to get its shareholders to cancel there shares for there own benefit?
CM has a hunch that moving to the Nasdaq will get a higher valuation for the company that Algernon deserves…. Wow just moving to the Nasdaq will do that alone?
“The CSE is a good place for SEED money” I can’t believe this guy; WTF seriously that’s a slap in the face, not to mention here in Canada we are uneducated investors who don’t understand the complexity of a Pharmaceutical development company. Hey CM your from Canada!
CM needs to step down from CEO, his hunches are nothing more than spiteful, egotistical, narcissistic delirious illusion.
Instead of thinking investors are the problem look at yourself CM.. CM needs to stop running away from his problems and face up to Penny land Shareholders who invested in him, his hunches and promises. CM told us two years ago that we would have Chronic cough data….
This company needs to prove to us and NEW more educated, glamorous Nasdaq investors that Algernon CM can deliver on completing trials in a economic way!
CM the reason we’re in this mess is merely your fault.
Please answer this question.
If one was to cancel there shares for tax loss could you ever get those shares back, or are they gone forever??
Please tell me, when has Algernon produced any significance to shareholders?
The answer is never, time and time again we continue to wait for nothing.
The only significance that has been generated is people on message boards boasting about the potential payouts, and making speculations to raise share price so they can make a quick buck.
The only future for Algernon is Bankruptcy, this company will continue getting diluted to oblivion, but before that King Cobra and CM will continue making money on others loses.
IMO 55
Ain’t
Getting
Nothing
I love the analogy with the deck of cards, my bet is the only card left is the joker, except nothing more from this company.
Thinking CM has an Ace up his sleeve is a joke of its self.
Best news to come; CM resignation, maybe Xmas will come early!
Only one person and his friends are getting rich here.
Insider trading is illegal but continues to happen in Algernon, maybe we all could have made some money if king cobra wasn’t at the helm.
This is bullshit, and Money Shot you know it.
This next move in nothing more than to secure King Cobras bank account.
Look who it is; King Cobra!