BioAmber Inc., a maker of renewable chemicals that sold shares to the public last year, expects to report its first profit as soon as 2016 on sales of a corn-derived chemical used to make plastics and foam cushions.
BioAmber will begin making succinic acid from dextrose, a type of corn sugar, at a commercial-scale plant in Sarnia, Ontario, by mid-2015, Chief Executive Officer Jean-Francois Huc said today by phone. With 20 supply agreements, including a large take-or-pay contract with bioplastics maker PTT MCC Biochem Co., sales should hit 24,000 tons in 2016, he said.
“We expect to be profitable as a company for the full-year 2016,” Huc said, based on current corn prices and running the 30,000-ton plant at 80 percent of capacity. The average of three analysts’ estimates compiled by Bloomberg is for a loss of 65 cents a share in 2016.
BioAmber, which sold 8 million shares to the public at $10 each in May 2013, may again tap public markets to fund construction of a second plant with capacity to produce 100,000 tons a year of corn-derived 1,4 butanediol, or BDO, starting in late 2017. Vinmar International Ltd., a closely held company based in Houston, signed a 15-year contract in January to buy all the plant’s production and take a 10 percent stake in the facility.
“That represents more than $4 billion of revenues over the life of the contract, based on average selling prices for BDO,” Huc said. “We have very good visibility on our growth.”
BioAmber, based in Plymouth, Minnesota, fell 2 percent to $9.89 at the close in New York. The company yesterday reported a loss of 45 cents a share, beating the 46-cent average of two analysts’ estimates compiled by Bloomberg.
BioAmber can make succinic acid, which is also the raw material for bio-BDO, for half the cost of the petrochemical version, he said. That means the company’s products compete with conventional chemicals on cost and quality, rather than relying on promoting their environmental benefits, he said.
(An earlier version of this story corrected the spelling of the CEO’s name.)