Wisconsin Bioplastic Daily Briefing

According to a recent press release from NatureWorks , a j/v of Cargill and Teijin (Japanese chemical company), the Blair, Nebraska plant has not even reached its full capacity of 140,000 tons, but they are exploring the possibility of adding a second manufacturing plant.

Demand for their bioplastic has been expanding, and new competition is coming online in 2009. Two new manufacturing plants are being constructed right now. Metabolix reported last week that the Clinton, Iowa plant is on schedule to start producing in the second half of 2009, and Cereplast is reporting a similar time frame for their manufacturing plant.

During 2008’s run-up in oil prices a number of companies began exploring the use of bioplastic because of sharp price increases for traditional petro-chemical feedstock and higher quality bioplastic that competed with oil based plastics.

NatureWorks news is great for the industry. Demand is strong, supply is short. Oil prices have stabilized, chemical companies have cut back on production, and bioplastic’s are still competitive. This is really great news for the industry as it moves forward into new markets. Brand-owners are finding value with the use of sustainable feedstock while keeping costs in line.

Yes, we are making broad assumption here, but take this one to the bank:
“We anticipate continued advancements in the resin's performance, as well as an increase in the number of products and applications using Ingeo™. We're starting our assessment now, recognizing that typical timeframes for design and construction of such facilities can be three years after a decision is made," said Marc Verbruggen, president and CEO.

Reading the tea leaves, Bioplastic is here to stay. Future oil prices will go higher, and the smart companies are positioning themselves now to enter the market with competitive products that consumers want.

Memo to NatureWorks….Wisconsin has a lot of corn. And wood. Lots of it. Think second generation bioplastic made from wood.