LANXESS is strengthening its commitment to renewable raw materials by investing USD 10 million in U.S. company BioAmber, Inc., based in Minneapolis, Minnesota, U.S., as part of a private placement.
BioAmber is a global leader in succinic acid produced from renewable resources such as corn. Together, the two companies have developed plasticizers, whose cost-effectiveness and safety profile make them sustainable alternatives to phthalate-containing formulations. Market entry is expected later this year. In addition, both companies are in talks to extend their partnership into further product areas in the future.
As part of the investment, LANXESS has received a minority shareholding in BioAmber and a seat on the Board of Directors, which will be filled by Jorge Nogueira, head of LANXESS' Functional Chemicals business unit that manufactures phthalate-free plasticizers. BioAmber was founded in October 2008 and has 40 full-time employees.
BioAmber produces succinic acid through the fermentation of renewable raw materials. The process developed by BioAmber consumes considerably less energy than the production of succinic acid using fossil fuels, is significantly more cost-effective and has a better carbon footprint. In the future, the company plans to use waste from the agriculture industry and sugarcane processing as starting materials.
“Our investment in BioAmber shows our commitment to launching a new generation of plasticizers that meet regulatory requirements and can also score in terms of sustainability,” said LANXESS’ Nogueira.
“We are pleased to have LANXESS as a strategic investor alongside Naxos, Sofinnova, Mitsui & Co. Ltd. and Cliffton,” said Jean-Francois Huc, BioAmber’s CEO. “BioAmber is fortunate to have a strong, committed group of investors and we welcome Jorge Nogueira, a dynamic and experienced chemical industry executive, to our board”.
Phthalate-free plasticizers gaining importance
As a global leader in the field of phthalate-free plasticizers, LANXESS has large production capacities, expertise in production and a global distribution network. Its key products include Mesamoll, Adimoll, Ultramoll, Unimoll and Uniplex. Through the acquisition of the UNITEX Chemical Corporation based in Greensboro, North Carolina, LANXESS also now has access to an additional capacity of 50,000 metric tons per year, plus an extensive portfolio of phthalate-free plasticizers such as benzoates, citrates and sulfonamides.
BioAmber manufactures bio-based succinic acid in Pomacle, France, at a plant with 3,000 metric tons of capacity per year. BioAmber plans to add a further 17,000 metric tons of capacity from 2013 with a new world-scale manufacturing facility to be built in Sarnia, Ontario, Canada, at LANXESS' site there. Both companies are preparing agreements for LANXESS to provide BioAmber with the land as well as the utilities and services needed to operate the facility.
The global market for phthalate-free plasticizers is currently estimated at EUR 1.3 billion – with annual growth rates of around seven percent. As a result of regulatory developments, demand for phthalate-free plasticizers is growing in markets such as North America, Western Europe and Japan. An increase in demand is also being observed in global growth markets such as Latin America. Authorities are increasingly restricting the use of phthalate-containing plasticizers for consumer goods such as toys, food packaging and cables.
LANXESS is strongly committed to using renewable raw materials to produce premium synthetic rubbers. At the end of 2011, LANXESS produced the world’s first bio-based EPDM rubber in Brazil. The Brazilian company Braskem supplies the raw material ethylene derived from sugarcane. The rubber is marketed under the name Keltan Eco.
In addition, LANXESS has invested in U.S. biofuel and biochemical manufacturer Gevo, Inc., which produces isobutanol from renewable resources such as corn. LANXESS plans to convert the isobutanol to isobutene, a key raw material for the manufacture of butyl rubber.
LANXESS strengthens commitment to renewable raw materials with investment in BioAmber