Key Takeaways from BioAmber's IPO Filing
8:53 PM MST | November 15, 2011 | By REBECCA COONS
Another day, another biochemical S-1. BioAmber, a biobased succinic acid producer based in Minneapolis, announced yesterday that is has filed for an initial public offering of up to $150 million.
The move isn’t too surprising, given the pace in which the company has racked up partnerships and the general momentum late-stage biochemical start-ups have built in 2011 (For more on the latter, see recent CW cover story Green Chemicals: Coming to a Supply Chain Near You). The company has partnered with Mitsui & Co. to build up to three commercial-scale plants. Downstream, it has deals with Lanxess (whose Sarnia, ON site will be home to BioAmber’s first production unit) for the development and sale of non-phthalate plasticizers based on succinic acid and; and has been named exclusive succinic acid supplier to Mitsubishi Chemical’s planned polybutylene succiniate (PBS) joint venture plant in Thailand.
Items of note from the filing:
• The company has secured supply agreements for the sale of over 84,000 m.t. of biobased succinic acid and its derivatives over the next five years. According to previous announcements, the Sarnia site will bring 17,000 m.t. of annual capacity online in 2013 and double that figure by 2014 once a Cargill yeast technology is introduced. The facility in Thailand, still in the feasibility stage, is expected to bring about 65,000 m.t. of annual capacity online in 2014.
• In addition to biobased succinic acid and 1,4-butanediol (made from succinic acid using technology licensed from DuPont), the company is developing biobased routes to adipic acid and caprolactam.
• The total addressable market for BioAmber’s products is $34 billion.
• The company believes its succinic acid is cost-competitive with oil priced at $35/barrel.
• In addition to the Sarnia and Thailand units, Mitsui and BioAmber are planning a third facility in either North America or Brazil that will be similar in size to the Thailand unit.
• The company posted zero sales in the first half of 2011, but expects to begin recording revenue from commercial sales in the first quarter of 2012 (the company has been operating a 350,000-L production unit operating at Pomacle, France).• The company is collaborating with Solvay to develop aliphatic and aromatic esters of biobased succinic acid for use in PVC in an effort to develop a renewable, phthalate-free plasticizer solution to Solvay’s PVC customers. I’ve been following BioAmber since 2009 (back when BioAmber was still a DNP Green Technology/Agro Industries Recherche et Developpement joint venture) and this was news to me.
• What was NOT news to me: BioAmber has competitors. Several of them. Some of them enormous chemical companies planning large-scale units of their own (table). However, as a BioAmber exec told me earlier this month, “We need to have a number of players moving forward to build the confidence the industry needs to move away from petrochemicals and adopt renewable chemicals in a meaningful way.”