MONTREAL—Cleantech firm BioAmber Inc. has signed a letter of intent with a major South Korean food and bioscience company to establish a joint venture in China.
BioAmber said Dec. 19 it plans to work with CJ CheilJedang Corp. to retrofit one of the Korean company’s fermentation plants with its bio-succinic acid technology.
“This JV is an opportunity for BioAmber to accelerate the deployment of its bio-succinic acid technology on a global scale without capital investment,” Jean-Francois Huc, the company’s CEO, said in a statement.
Under the agreement CJCJ would cover all capital costs of the plant retrofit and own 65 per cent of the JV. BioAmber would hold a 35 per cent stake and receive royalty payments for use of its technology.
The Montreal-headquartered firm has developed a cost-effective process to produce succinic acid using sugar, which drastically reduces the emissions regularly associated with producing the compound. The company is currently ramping up production at its commercial-scale bio-succinic acid plant in Sarnia, Ont., as well as working toward the development of a second plant in North America.
“This joint venture would allow us to quickly penetrate the Chinese and broader Asian market and accelerate cash flow and earnings for our shareholders,” Huc added. “It would also serve as a blueprint for the build-out of additional bio-succinic acid production with very limited capital investment.”
The deal remains subject to certain conditions, but BioAmber expects to firm up the agreement by next July.
If both companies move forward with the JV, the CJCJ plant could begin producing bio-succinic at the beginning of 2018.