Lambton County is set to become an investor in a non-for-profit agency helping new bio-chemical companies set up their first manufacturing sites.
County council recently authorized finalizing a $2.5-million five-year loan and a $2-million investment in a Bioindustrial Innovation Canada’s investment fund so it can fully access $4.5 million in matching federal funds.
The loan includes $1 million advanced to the Sarnia-based agency in March after it approached the county for help.
In 2016, Bioindustrial Innovation Canada was approved for $5.5 million in federal matching funding but only $1 million of its own funds available, so it asked Lambton County to loan it the remaining $4.5 million.
The $1-million advance by the county allowed the agency to secure matching federal funding set to lapse March 31.
John Innes, general manager of the county’s finance division, said that when county staff were looking into details of the loan it became clear a loan of $2.5 million was the most the agency’s cash flow “could reasonably be expected” to support.
The proposal to provide the remaining $2 million as an equity investment by the county came up in discussions with the agency, Innes said.
Those investment funds are expected to be returned to the county when the agency liquidates investments it has made in start-up companies, Innes said.
“It was the county’s desire to potentially invest directly in projects that are a benefit to the county, and we didn’t have a problem with that,” said Sandy Marshall, executive director of Bioindustrial Innovation Canada.
“If that’s how they wish to do it, we were quite supportive of having them partner with us.”
The initial $1 million the county advanced the company, with the matching federal funds, allowed the agency to invest in Origin Materials, a California-based company that announced in June it will build a commercial-scale demonstration plant in Sarnia.
Marshall said it was also part of a pool of money the agency used to invest in Comet Biorefining and Ubiquity Solar, companies also planning to set up manufacturing sites in Sarnia.
“I’m really excited that the county continues to see their way forward to support us,” he said.
St. Clair Township Mayor Steve Arnold expressed concerns about the funding when county council voted to move ahead with the loan and investment.
“It’s not that they don’t do a good job,” he said.
“And, it’s not that I don’t support the activities that they do.”
But, Arnold said he would like county council to receive information on the agency’s budget.
“That’s only prudent for taxpayers,” he said.
“And also, I want investments in Lambton County. I don’t want investments in somewhere else in the province of Ontario.”
Marshall pointed to the agency’s investments in Origin Materials, Comet Biorefining and Ubiquity Solar.
“We’ve already invested a $1.5 million in those companies,” he said.
The agency does make investments across southern Ontario, Marshall said.
“But, quite frankly, I don’t see any reason why the county money won’t be used on investments within our region because many of the best opportunities are here in Sarnia-Lambton.”
Access to capital is one of the most critical requirements for early-stage companies the agency invests in, Marshall said.
“They often have excellent technologies, and they have good business plans and they have developed markets and so on, but the biggest challenge they have is ultimately getting the money together to be able to build their first commercial demonstration plants,” he said.
“That’s really what you’re seeing happen here in Sarnia-Lambton.”