BioAmber signs exclusive supply deal with Xuchuan

Will produce bio-succinic acid from its Sarnia plant over a five-year contract.

MONTREAL — BioAmber Inc. has signed an exclusive supply agreement for bio-based succinic acid with Xuchuan, a global producer of polyester polyols based in China.

The Montreal producer of sustainable chemicals said contract, which runs from 2015 to the end of 2019, involves BioAmber Sarnia, a joint venture with Mitsui & Co. It will ship bio-based succinic acid it has produced in Sarnia, Ont. to Xuchuan’s Chinese facilities.

No financial details were provided.

Polyester polyols are used to produce a wide range of products including paints and coatings, polyester resins and synthetic leather. Xuchuan operates four polyester polyol plants in China and has an annual production capacity of 150,000 tons.

Xuchuan is initially launching systems for cast polyurethane elastomers (CPU) made with bio-succinic acid. CPU is used in automotive instruments, caster wheels, industrial and mining equipment, power tools, industrial tires, coating rolls, drive belts, mould makers and hoses.

BioAmber said by replacing adipic acid with succinic acid, Xuchuan has produced CPUs that offer better properties: they are more abrasion/scratch resistant and more resistant to solvents. The forecasted succinic acid volumes in the contract for this initial application are 300 to 500 tons per year.

Xuchuan is broadening its line of sustainable, bio-succinic acid based polyester polyols to other applications, including resins for shoe soles, coating and synthetic leathers. BioAmber projects long-term sales potential to Xuchuan for these applications could be several thousand tons of succinic acid per year.

BioAmber’s Sarnia plant is to be completed in early 2015 and will have an initial capacity of 30,000 tons per year. BioAmber has signed take-or pay agreements that commit 50% of the output over the first three years of production, and has committed the balance of available capacity in 2016 and 2017 by signing 20 supply and distribution agreements.

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