BioAmber and CJ CheilJedang plan JV for succinic acid production in Asia
BioAmber Inc. announced that it has signed a non-binding letter of intent with South Korean-based CJ CheilJedang Corporation (CJCJ) to establish a joint venture in China to competitively produce up to 36,000 t of bio-succinic acid annually and commercialise the output in Asia.
According to the companies, this can be achieved rapidly and with limited capital investment by retrofitting an existing CJCJ fermentation facility with BioAmber's succinic acid technology. CJCJ would incur all capital costs required to retrofit its fermentation facility, including the capital needed during plant commissioning and startup, and production would begin in the first quarter of 2018. If market demand were to subsequently exceed production capacity, the JV could expand production through debottlenecking and/or additional investment.
CJCJ would own 65 % of the JV and BioAmber 35 %. The proposed JV is subject to certain conditions, including technical and commercial due diligence, with the definitive agreements expected to be signed by July 2017. As part of the letter of intent, BioAmber will be selling CJCJ bio-succinic acid manufactured at its Sarnia, Ontario plant, so that CJCJ can undertake market development in China and South Korea in the first half of 2017.