FocusRecession limits bioplastics demand growth

12 June 2009 23:01  [Source: ICIS news]

NEW YORK (ICIS news)--Growth in the bioplastics industry has slowed due to decreasing demand driven by the global recession, several producers said on Friday.

US bioscience company Metabolix said that the recession and lower oil prices earlier in the year have stalled some interest in the company’s bioplastics programs on the part of customers and prospects.

The company recently conducted one-on-one discussions with top customers and prospects on development programs for Metabolix’s Mirel bioplastic. About 4% of companies have put their Mirel-related plans on hold and 3% have their programs under review, said Metabolix CEO Rick Eno.

Still, 74% of those customers and prospects anticipate moving ahead with their plans, he said.

“Given the difficult external environment, we are quite encouraged by the results of these discussions and believe it is due to the unique attributes of Mirel,” Eno added.

Metabolix is marketing its Mirel bioplastic through its 50-50 joint venture company Telles with US agribusiness Archer Daniels Midland. The company expects to start its first commercial production facility, which has a capacity of 110m lbs/year (50,000 tonnes/year) in Clinton, Iowa, this December.

“We will begin shipping the product to customers who will be introducing new products and applications over the next 12-24 months,” said Eno.

US bioplastics producer NatureWorks said sales growth of its bioplastic Ingeo has also slowed during the global recession.

NatureWorks, which produces and markets corn-based polylactic acid (PLA) plastic, is a 50-50 joint venture between Japanese chemical company Teijin and US agribusiness Cargill.

NatureWorks spokesman Steve Davies did not disclose specific sales numbers, but said that overall sales in 2009 for the company have still continued on an upward trend.

“We anticipate steady and gradual growth for the market over the next two years,” said Davies. “Overall growth for bioplastics is positive on a global basis.”

NatureWorks said it is assessing a second bioplastics facility in either Asia or Europe.

The company just this month completed a expansion of its Blair, Nebraska, PLA plant, doubling production from 70 tonnes/year to 140 tonnes/year.

Last month, US bioplastics producer Cereplast announced that it will exit the manufacturing business by contracting with large plastic compounders to produce its bio-based resins.

Cereplast said the move will dramatically reduce its costs to produce plastic resins. The company has production facilities at its headquarters in Hawthorne, California, with a 45m lb/year nameplate capacity and a yet-to-be-opened 50m lb/year facility in Seymour, Indiana.

In the first quarter, Cereplast reported that net sales decreased by 37% to $560,577 (€400,170) compared with year-ago levels.

“The decrease is driven by a sales volume decline, as existing customers have delayed orders and/or launches of their own commercial applications with our resins due to the general economic downturn and global drop in demand,” Cereplast said.

The company said it plans to sell or lease the Indiana plant to plastic compounders. Production in California will continue until Cereplast is able to reach an agreement with outside compounders to have its products produced on a toll basis.

($1 = €0.71)

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