Bioplastics growth potential boosts US Cereplast - report

26 May 2009 22:24  [Source: ICIS news]

HOUSTON (ICIS news)--Beacon Equity upgraded US bioplastics producer Cereplast to the speculative buy level behind growth potential within the company’s products, the US small-cap research firm said on Tuesday.

Cereplast doubled its sales revenue to $4.6m (€3.3m) in 2008 from $2.3m in 2007 and has said it expected to double sales revenues again in 2009.

Beacon quoted a market report from Helmut Kaiser Consultancy, which expected the global bioplastics market to grow 20-30% /year, to 5m tons/year in 2015 from 200,000 tons/year in 2006, further fuelling the optimistic industry outlook.

“[The company’s] proprietary technology, environmentally friendly resins and increasing visibility make Cereplast a potentially attractive takeover candidate for a larger chemicals and plastics company,” Beacon said.

Cereplast has announced supply deals in 2009 with Georgia-Pacific, Warner Tool Manufacturing and Dorel Juvenile Group, a division of Dorel Industries.

Cereplast said it would rely on larger plastics compounders to meet such supply agreements instead of increasing its own production capacity.

To that end, Cereplast signed a distribution deal with US plastics compounder A Schulman earlier this year.

Cereplast, which traded early Tuesday at 15 cents/share on the over-the-counter (OTC) markets, has a price target of $1.12/share, according to the research report.

($1 = €0.71)

To discuss issues facing the chemical industry go to ICIS connect

By: Ben DuBose
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index