The odds that Dutch renewable chemistry company Avantium will indeed be building its long-awaited flagship FDCA plant have been considerably shortened with the announcement yesterday of its final investment decision. The FID was made after the company successfully fulfilled the three key conditions it had defined.
These conditions were: securing sufficient financing, finalising the engineering and establishing the supply chain, and obtaining sufficient offtake commitments for the Flagship Plant. With the recent signing of a €90 million committed debt financing term sheet, the final outstanding financing condition has now been met. To get to this point, Avantium has actively sought to build partnerships across the value chain – customers, suppliers, governments and financial partners. The latest three-year €90 million debt financing package was granted by a consortium of lenders, comprising the four Dutch banks ABN AMRO Bank, ASN Bank, ING Bank and Rabobank, as well as the government backed Dutch impact investment fund, Invest-NL.
Avantium’s flagship plant will be the first in the world to produce FDCA - furandicarboxylic acid - on a commercial scale. It will have a capacity of 5 kilotons per annum.
FDCA is the key building block of PEF, a 100% plant-based, recyclable polyester material similar to PET, but offering additional functional advantages, such as better moisture and gas barrier properties.
According to Avantium, the FDCA flagship plant will demonstrate the viability of large-scale manufacturing of PEF to consumers, customers and partners, thus paving the way to expand the applications of the new material. To access what it says is a potential total end-market of $200 billion per year, Avantium will be licensing its technology to interested partners around the world.
Referring to the FID as a ‘pivotal point in our journey to commercialise the next-generation plant-based plastic PEF’, Tom van Aken, CEO Avantium, said that ‘bringing a new plastic to the market is a remarkable feat’.
“With the backing of all our stakeholders, our perseverance, efforts and drive are about to bear fruit.”
The total financing package for the construction of the FDCA flagship plant consists of subsidiesi, third party equity, Avantium equity and bank loans. Financing is subject to customary terms and conditions, including financial close. To reach financial close, shareholder support is being sought for the FID to enable Avantium to execute all the relevant documentation necessary to complete the transaction, at which point, all major project agreements will consequently become effective. Financial close is expected in the first quarter of 2022.
The front-end-engineering and design (FEED) phase was completed in 2021. For the construction phase, Avantium and Worley signed a reimbursable engineering, procurement and construction contract for the FDCA Flagship Plant, conditional to financial close, with a contracted delivery date of Q4 2023. Avantium expects the flagship plant to be operational in 2024.
Avantium has also already signed an FDCA polymerisation contract - conditional to Financial Close - with polyester supplier Selenis, as well as a multi-year agreement with agricultural cooperative Tereos Cooperative group, securing a supply of 100% bio-based and locally produced high-fructose syrup as feedstock for the flagship plant.
Moreover, Avantium has secured five offtake commitments representing over 50% of the total flagship plant capacity. Contracts have been signed with specialty chemical company Toyobo (Japan), specialty polyester film producer Terphane (US), beverage bottling company Refresco (Netherlands), international rigid packaging supplier Resilux (Belgium), and an undisclosed major global food & beverage brand owner. Avantium continues to pursue negotiations with multiple potential international partners to secure additional offtake commitments.