The plant will be a retrofit of an existing CJ CheilJedang fermentation unit and is expected to produce 36,000 metric tons per year. CJ CheilJedang will cover all capital costs and own 65% of the joint venture. BioAmber, which owns the technology to produce biobased succinic acid, would hold the remaining 35% stake. The joint venture would also pay BioAmber a technology royalty and CJ CheilJedang a tolling fee, although additional financial terms were not disclosed.
Startup is targeted for the first quarter of 2018. The LOI is non-binding, and consummation is subject to technical and commercial due diligence. The companies aim to sign definitive agreements in July 2017. In the meantime, BioAmber will sell biobased succinic acid produced at its Sarnia, Ontario facility to CJ CheilJedang so that the latter can begin market development efforts in Asia on behalf of the planned joint venture.
BioAmber CEO Jean-Francois Huc says the joint venture is an opportunity for the company to deploy its technology quickly and without capital investment. “It would also serve as a blueprint for the build-out of additional bio-succinic acid production with very limited capital investment,” he adds.
BioAmber says both companies are confident the CJ CheilJedang plant can be retrofitted at a “fraction of what it cost” to build the Sarnia plant. BioAmber is also pursuing a second commercial facility in either the United States or Canada.