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BANGKOK — Thai plastic packager Multibax Public Co. Ltd. is more than doubling capacity for its new line of biodegradable bags, based largely on strong European demand for such lower-carbon-footprint packaging.
Multibax plans this year to add a second extrusion line for bioplastics products, with an annual nameplate capacity of 8 million pounds, and expand capacity in its more traditional business of polyethylene bags, said Pisuth Lertvilai, deputy managing director of the Bangkok-based company.
Its current nameplate capacity for bioplastic bags is about 4.4 million pounds a year, he said.
Looking to reduce costs for biodegradable resins, the company has spent at least 50 million Thai baht ($1.67 million) since 2008 to develop its own formulations, blending tapioca starch derived from Thai cassava root with imported biodegradable polymers to manufacture its own blend of material called MBIO resin.
"We are well aware that if we just buy biodegradable resin from overseas, blow the bag and sell, we won't be competitive," he said. "As such, we then decided to invest in our own R&D."
The research took several years to pay off, and the company only started shipping its MBIO plastic bags in 2012 because it needed to go through the detailed certification for international standards for biodegradability, heavy-metal residue and eco-toxicity, including Germany's DIN Certco, BPI in the United States, and EN 13432 and ASTM 6400, Lertvilai said.
"Right now there are so many customer inquiries [for the biodegradable bags] we can't keep up," he said in an interview at the Inno Bioplast 2013 conference, held Jan. 24-26 in Bangkok.
Lertvilai said that while biodegradable plastics are only 10 percent of its overall business, the market is at the moment stronger than its traditional petrochemical-based plastic packaging because there are fewer companies capable of meeting the strict standards for biodegradable packaging.
"Working in the bioplastics market is easier," he said. "I would say conventional [plastic packaging] is very, very competitive, but in the bioplastics market there are only a few good-quality processes."
Multibax, which is publicly traded on the Stock Exchange of Thailand, hopes its biodegradable materials will account for 40 percent of sales within five years, Lertvilai said.
It has developed both film and injection grades of its bio-based polymers, and is exploring the possibility of selling its resins, he said in a presentation at Inno Bioplast.
The company last year had about 1.6 billion baht ($53.4 million) in sales.
Multibax also plans to introduce a second MBIO formulation, for carrier bags, he said. Its first formulation has been for garbage bin liner bags. It also plans to start a new pilot plant for more extensive research and development by 2015.
Besides the bioplastics investment, the company also plans to increase extrusion capacity for its petrochemical-based products this year from 40 million pounds to about 45 million pounds, he said.
Multibax's factories are all located in an export processing zone in Chonburi province, with 100 percent of its products shipped overseas, he said. It employs about 800 people.