BioAmber Inc., an industrial biotechnology company producing sustainable chemicals, has signed a take-or-pay contract for bio-based 1,4-Butanediol (BDO) with Vinmar International. Under the terms of the 15-year master off-take agreement, Vinmar has committed to purchase 100 percent of the BDO produced in a 100,000 ton per year capacity plant that BioAmber plans to build in North America and commission in 2017. Vinmar also plans to invest in the BDO plant alongside BioAmber.

BDO is a building block chemical that is used in a wide range of products, including engineering plastics for the automotive industry, polyurethanes, biodegradable plastics and spandex. The current size of the global BDO market is approximately $4 billion. BioAmber produces BDO by combining its succinic acid technology with a catalyst technology licensed from DuPont and the company believes its bio-based BDO is cost competitive with petroleum derived BDO. To date, BioAmber has validated the high quality of its bio-based BDO with over 20 purchasers of petroleum BDO.

Following the financing, construction and commissioning of the 100,000 ton BDO plant, Vinmar will be obligated to purchase 100 percent of the BDO produced for 15 years, and BioAmber will be obligated to sell exclusively to Vinmar. Vinmar also plans to invest in the BDO plant, taking a minority equity stake of at least 10 percent. As part of the agreement, Vinmar has a right of first refusal to invest in and secure 100 percent of the off-take from a second BDO plant that BioAmber would build in the future.

In order to seed the market for its bio-based BDO, BioAmber plans to initially produce approximately 4,000 tons of BDO annually at a toll manufacturing facility that the company expects to commission in 2015. The tolling facility will convert bio-succinic acid produced at the Sarnia, Canada plant that is currently under construction. Under the terms of the agreement announced today, Vinmar has committed to also purchase 100% of the BDO produced at the planned tolling facility.