BioAmber begins commissioning Sarnia plant

By Erin Voegele | March 16, 2015

BioAmber Inc. has released 2014 financial results and announced commissioning has begun at its 30,000 metric ton succinic acid plant in Sarnia, Ontario. The facility is expected to reach commercial production by the third quarter.

During an investor call, Jean-Francois Huc, CEO of BioAmber, reported that approximately eight weeks of construction is left before the Sarnia plant is complete. The commissioning process, which will be completed in five phases, has already begun. That process is scheduled to take approximately five months to complete, with commercial production expected to be reached by the third quarter of this year.

According to Huc, not a single lost-time injury has occurred so far during the construction process, with more than 420,000 hours worked. The project is also expected to stay within the original budget estimate.

Huc noted that the company has finalized all of the essential elements that will be needed to operate the plant. BioAmber has hired and trained all of its plant operators, engineers, maintenance staff and supply chain workers. The company has also successfully hooked up and commissioned the steam and electricity provided by third parties. In addition, long-term supply agreements are in place for sugar, power and steam.

Moving into 2015, Huc said BioAmber has two primary objectives. The first focuses on ramping up production at the Sarnia plant and selling the facility’s output. The second includes a goal of accelerating development on a second commercial plant. According to Huc, BioAmber aims to reach financial close for the second plant by early 2016.

Huc also spoke briefly about falling oil prices, indicating a strong business case can be made for Sarnia’s future production, even at $50 per barrel oil.

BioAmber reported revenues of $1.5 million for 2014, down from $2.7 million the prior year. Sales volume in 2014 was slightly higher, but offset by a decrease in average sales price that resulted from customers seeking pricing more in line with the prices BioAmber has contractually committed to for future Sarnia supply.

Gross loss was $4.5 million, compared to a gross loss of $24,000 in 2013. The increase was due to lower selling prices combined with an inventory reserve of $2.5 million and higher fixed production costs in 2014 than in 2103. The costs resulted from the transition away from the French demonstration plant to Sarnia production and pricing.

BioAmber reported a net loss attributable to BioAmber stakeholders of $46.4 million, or $2.32 per share, compared to a net loss of $33.2 million, or $2.13 per share, the previous year. The adjusted net loss attributable to shareholders was $34.7 million, or $1.74 per share, compared to $33.6 million, or $2.16 per share, in 2013.