Canadian Manufacturing

Feds lend $10M to bio-chemical producer to build Ontario plant

Agriculture and Agri-Food Canada loan will go toward BioAmber's construction of succinic acid plant



SARNIA, Ont.—The federal government is lending $10-million to a Quebec-based firm for the construction of a commercial-scale bio-based chemical plant in Ontario—the first facility of its kind in Canada.

According to Agriculture and Agri-Food Canada, it is providing the interest-free loan to BioAmber Sarnia Inc. for the construction of a massive succinic acid plant in Sarnia, Ont.

The plant will have an annual production capacity of 30,000 tonnes when complete, according to the firm.

BioAmber Sarnia, a subsidiary of BioAmber Inc., has previously received $35-million in financing from government organizations including Sustainable Development Technology Canada (SDTC), the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) and the Ontario Ministry of Economic Development, Trade and Employment.

The loan from the federal agriculture ministry was provided through its AgriInnovation Program.

“We are very appreciative of the support that the AgriInnovation Program has provided to our Sarnia plant,” BioAmber CEO Jean-Francois Huc said in a release.

“This is a great example of how government can support Canadian farmers, create jobs and reinvigorate the manufacturing sector, while also making a meaningful contribution to climate change.”

Produced using corn-derived feedstock, succinic acid is used to manufacture paints, plasitcs, resins, de-icers, pharmaceuticals, solvents, food additives, fabrics and cosmetics.

The process replaces the conventional production method that uses petrochemicals and is carbon neutral.

The plant is expected to create 60 direct jobs when it is fully operational.

According to the agriculture ministry, local corn growers in the Sarnia, Ont., area will benefit from the plant’s demand for crop, with an estimated 1.5 million bushels of corn, worth $10-million, needed in the first year of production alone.

That amount is expected to increase to three million bushels, worth $20-million, by 2015.

BioAmber said it expects to repay the loan in equal annual installments between 2015 and 2024, and that the company will continue to pursue other financial support to help fund the plant.

“We are actively negotiating additional loans for Sarnia that will further ease the investment burden for BioAmber, which is an early stage company,” BioAmber executive vice-president Mike Hartmann said.

“Our goal is to get Sarnia operational in early 2015 and these loans will help ensure that we have the capital needed to ramp up production and become a profitable company.”

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