BioAmber reports operational progress at Sarnia plant

By Erin Voegele | March 16, 2016

BioAmber Inc. has released financial results, reporting that the company’s fourth quarter performance exceeded its expectations, with $1.1 million in sales of bio-succinic acid during the three-month period. This includes initial shipments to PTTMCC Biochem, which uses biobased succinic acid in the production of biobased plastics. In addition, more than 100 companies have tested and qualified the bio-succinic acid produced at the company’s Sarnia, Ontario, plant.

 "We made excellent progress in Sarnia during the fourth quarter. Fermentation continued to perform very well and purification improved steadily over the quarter as we spent more time operating the equipment, made minor modifications to the process and our operators gained experience. We encountered typical problems expected during a start-up, but we were successful in producing quality product at a competitive cost, and initiating customer sales," said Jean-Francois Huc, CEO of BioAmber. "Mitsui & Co.'s recent investment in Sarnia strengthens our balance sheet and is a strong endorsement from a leading global player that is very active in the renewables sector and has intimate knowledge of the Sarnia plant.”

During an investor call, Huc said the fact that BioAmber started to produce and sell product within two months of starting up the Sarnia plant was a tremendous achievement.

Regarding operations, Huc noted that it is common in the early stages of ramp up to experience problems, and Sarnia was no exception. What is remarkable, he said, was even when these problems occasionally occurred, the company’s yeast was able to produce and generate yields and productivity levels that were very close to those associated with problem-free fermentation.

Huc also addressed the possible impacts of low oil prices on the company’s operation. He stressed that the company’s supply contracts have selling prices decoupled from oil. While there is no guarantee BioAmber’s customers will not seek lower prices when the renegotiate their contracts, Huc said the prices currently set are based on the value the company’s biosuccinic offers. The selling price during the fourth quarter was slightly above $2,000 per ton. However, Huc also noted that BioAmber could be exposed to softening demand for its products if oil prices were to stay in the $30-per-barrel range for an extended time.

Revenues for the full year 2015 reached $2.2 million, up from $1.5 million the prior year. This included the $1.1 million in sales reported for the fourth quarter. Average selling prices declined from 2014 as customers obtained lower pricing for production coming out of the Sarnia facility.

Gross loss for the year was $441,000, down from $4.5 million the previous year. The company reported a net loss attributable to BioAmber shareholders of $37.2 million, or $1.52 per share, compared to a net loss of $46.5 million, or $2.32 per share, in 2014.