04 January 2010 22:27 [Source: ICIS news]
NEW YORK (ICIS news)--US bioplastics company Cereplast is moving all of its operations from California to Indiana to save on costs, chairman and CEO Frederic Scheer said on Monday.
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Cereplast said it is also on the verge of closing a partnership deal with a large US-based third-party compounder, which will also be announced in the first quarter. The compounder will produce most of Cereplast’s proprietary resins, said Scheer.
The moves are part of Cereplast’s restructuring program announced in May 2009, which will refocus the company on proprietary product development and marketing.
“We expect the restructuring program that we announced last year to be completed by the end of first quarter,” said Scheer.
“By that time, we also expect operations from our
Cereplast expects its 2009 sales to come in at around $3m-$4m (€2.1m-€2.8m), compared with $4.5m in 2008. The company reported a decline in volume sales last year, which it attributed to the general economic downturn.
“Existing customers have delayed orders and/or launches of their own commercial applications of their resins due to the recession and global drop in plastic demand in general. When the economy is shrinking, the environment is usually not the top priority anymore,” said Scheer.
Scheer said he expects higher revenues for 2010 with the anticipation of lower operating costs resulting from the restructuring as well as the commercialisation of products incorporating its bio-resins from US-based customers such as paper company Georgia Pacific and juvenile products company Dorel Industries.
“We expect to see in the second quarter commercialisation of some of our customers’ products using our resin. The largest contract we finalized last year was with Georgia-Pacific, and we hope to see their products hit the shelves sometime in the first quarter of this year,” added Scheer.
Last December, Cereplast raised $2.23m from accredited and institutional investors by selling 44.6m shares of the company’s common stock at a price of $0.05/share.
($1 = €0.70)
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