Biohybrid Chemistry Cluster
Ontario’s Sarnia-Lambton Region Develops from Petrochemical Pioneer to Biotechnology Hub
Since the discovery of large oil reserves in the late 1850s, Ontario’s chemical industry has steadily grown, turning the province into a global hub for the petrochemical industry. Today, the region around Sarnia-Lambton in the south-west of the province hosts Canada’s largest chemical and biochemical manufacturing cluster with extensive talent, experience and supply chain.
Sarnia-Lambton is home to global players from the oil, gas and petrochemical industry such as Shell, ExxonMobil, Lanxess, Nova Chemicals and CF Industries. The presence of large companies can provide synergies for newcomers. German specialty chemicals company Lanxess, for example, owns and operates the Bio-Industrial Park Sarnia. The park provides the ability to co-locate within an existing plant site and utilize existing infrastructure, including a world-class industrial wastewater treatment facility.
Building on this strong foundation, Ontario’s chemical industry is today developing new, sustainable production solutions. With an increasing emphasis on researching and commercializing biotechnology in addition to its strengths in classic petro-technology, Sarnia-Lambton has become a unique biohybrid chemistry cluster and is at the center of a burgeoning industrial biotech sector. Key to this success are a strong government - industry collaboration and a nurturing business environment.
Government and Industry Collaboration
The Government of Ontario is working with the industry to create the right business environment and facilitate investment. Committed to bringing together private and public bodies and helping companies connect with each other, the Government of Ontario regularly collaborates with Sarnia-Lambton’s economic development organization, the Sarnia-Lambton Economic Partnership. Established in 1994, the Partnership serves as a key point of contact for companies that want to do business in the region and provides market information as well as strategic and administrative support.
Link between Concept and Commerce
The Western Sarnia-Lambton Research Park offers both multinational companies and start-ups alike an attractive location for research, development and commercialization of innovative technologies. Associated with Western University and Lambton College, the Research Park is a key contributor to successful translation of ideas or discoveries from the lab bench to the marketplace. The Research Park is home to the Bowman Centre for Technology Commercialization, Canada’s largest clean-tech incubator. Western University’s Research Parks, including its Sarnia-Lambton Research Park, were ranked among the global top 25 University Business Incubators and 7th in North America.
As a government-funded catalyst, Bioindustrial Innovation Canada (BIC) helps position the Sarnia-Lambton region as a world-scale hybrid chemistry cluster. BIC manages an investment fund to provide essential capital to early start-ups that do not yet qualify for regular venture capital. Early stage funding is essential for young firms and enables them to refine their business models and attract larger-scale follow-up investments. To date, four Sarnia-Lambton-based companies that received early BIC funding have successfully raised more capital through initial public offerings.
Compelling Business Case
There are various reasons for investors and site selectors to choose Ontario.
- Market: Ontario is located in the middle of North America’s industrial heartland that grants companies easy access to the vast $19 trillion NAFTA market. Thanks to an extensive transportation infrastructure, a market of 141 million people can be reached within a single day’s drive.
- Talent: The region offers a highly skilled labor market: 65 % of adults have completed post-secondary education, more than in any other OECD country. 27 colleges and universities offer a variety of degrees in chemical and biochemical related programs, including Chemical Engineering, Applied Chemistry and Chemical Process and Production.
- Innovation: Companies in Ontario enjoy generous R&D tax credits. They offer a 14 % cost advantage over the US and apply to a broader range of eligible costs than in the US and many other countries.
- Business costs: The combined manufacturing income tax rate in Ontario is 11 percentage points below the US average, labor costs are among the lowest in the G7.
- Resources: Ontario is directly connected to an extensive pipeline system bringing oil and gas from all over North America, including the nearby Marcellus and Utica basins, to the province. Moreover, the region is rich in agricultural and wood biomass feedstock, giving reliable access to raw materials.
- Quality of life: Canada ranks third in the OECD’s ‘Better Life Index’ with Ontario being no exception. Universal healthcare and a variety of renowned universities and colleges make the province an attractive destination for newcomers.
BioAmber - a Success Story
BioAmber, the world’s largest producer of succinic acid, is a prominent example of the innovative biochemical industry in Ontario. At its new plant in Sarnia-Lambton, BioAmber uses cutting-edge biotechnology to produce succinic acid sustainably from glucose instead of fossil fuels – thereby reducing the company’s local greenhouse emissions by 100 % and bringing down energy costs by 60 %. These savings allow for competitive product pricing even in a low oil price environment. Major customers of BioAmber include Mitsui, DuPont, Xuchuan Chemical, Covestro and Mitsubishi Chemicals. Bio Amber’s success has led to expansion plans: due to the high demand for their sustainable chemicals, the company is currently exploring options for second and third facilities.
Key factors that influenced BioAmber’s decision to pick Sarnia-Lambton as the location for the construction of its state-of-the art, $140 million plant include geographic location and market access. Sarnia-Lambton’s access to resources, such as affordable energy and regional agricultural produce as raw material for its production are also key. Another main point in favor of Ontario as a business location are the low operating costs and potential government support such as an affordable loan from the Ontario Ministry of Economic Development, Employment and Infrastructure (MEDEI).
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