01 August 2012 17:36 [Source: ICIS news]
By Clay Boswell
NEW YORK (ICIS)--A new production agreement with Spanish fermentation specialist Antibioticos puts Metabolix back on track to scale up production of its bioplastic Mirel, an executive with the US-based company said on Friday.
“We've got a lot of work to do, but I think we've finally got our feet back on the ladder, and we've got to start climbing,” said Oliver Peoples, Metabolix’s chief scientific officer.
Metabolix announced that it had signed a letter of intent with Antibioticos for the production of Mirel at its manufacturing facility in Leon, Spain, on 26 July.
The partners will first conduct validation runs on production-scale equipment at Antibioticos. They plan to enter into a definitive contract manufacturing agreement based on the validation runs and economic and engineering feasibility studies.
Metabolix expects commercial supply to begin in 2013.
Metabolix was forced to find a new manufacturing partner after US agro–products giant ADM backed out of Telles, the joint venture that was to market Mirel, in January.
ADM was to have produced Mirel at a new facility in Clinton, Iowa.
“The Antibioticos site really offered the fastest way to get back in business,” said Peoples. “They have a very high-quality group of people at Antibioticos and quite a lot of equipment and facilities in place that could be used for Mirel production. That was a large part of the decision-making process.”
Metabolix aims initially to produce 10,000 tonnes/year through Antibioticos, a scale sufficient to supply existing customers while continuing to develop the market.
Metabolix already has 5m lbs (2,270 tonnes) of Mirel in inventory, material produced by ADM.
A much larger facility is the ultimate objective, however. “The prospects for Mirel vastly exceed that capacity,” Peoples noted.
ADM had built the 110m lb/year Clinton facility with this larger volume in mind, but the market did not grow as quickly as expected. On 12 January, the company announced that it would close the under–utilised facility and end Telles, surprising Metabolix and knocking its share price from $5.99 to $2.54 overnight.
Shares traded at $1.85 late Wednesday morning.
Although ADM’s exit was “very painful”, Peoples said, the partnership was beneficial.
“The education and learning we got in the relationship with ADM – about scaling the manufacturing technology, about the level of interest and the challenge in the marketplace – really put us in a very good spot,” he said.
“I think it would have been better to have a smaller plan, but I’m not sure we’d have had the same degree of learning, nor am I sure we would have been able to afford the learning on our own,” he continued.
“It's one of those things where, perhaps, it's eventually working out for the best,” he said. “But Metabolix has to prove that.”
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