By: Steve Toloken
February 14, 2013
BANGKOK -- Thailand's plastics industry has an ambitious goal -- become one of the hubs for the emerging bioplastics industry -- as it aims to capture some of the sizable worldwide biopolymer investment expected in the next few years.
The Southeast Asian country is not traditionally thought of as a place that develops cutting-edge polymers, but Thai officials used a recent conference in Bangkok to make their case for linking their large agriculture and plastics industries to become a center for making plant-based plastics.
Delegates at the Inno Bioplast 2013 conference acknowledged many challenges, such as developing local markets to keep demand sustainable and competing against the lower energy costs from North American shale gas.
But some international executives said they believe Thailand has a solid chance, as the industry starts to make serious investments.
"These next five years will determine where billions of dollars of investment will be spent," said Mark Verbruggen, CEO of polylactic acid resin maker NatureWorks LLC, in a speech to the conference. "You're going to have regional hubs around the world, two, maybe three, where the biopolymer industry will cluster. Thailand today is extremely well-positioned to be one of those hubs."
Minnetonka, Minn.-based NatureWorks, which is 50 percent owned by Thailand's PTT Public Co. Ltd., is considering Thailand for the site of its second resin plant, after its current facility in Nebraska.
In Thailand's favor, it can tap a very big agricultural base, as the second-biggest food exporter in Asia after China, according to a Thai Board of Investment analysis of plastic industry opportunities.
The Bangkok-based Thai Bioplastics Industry Association claims that Thai cassava starch would be 30 percent cheaper as a biopolymer feedstock than corn starch in the United States, for example.
The Thai government has spent $60 million to implement a detailed bioplastics development roadmap it unveiled in 2008, including a new round of tax incentives announced in January.
The country also has Southeast Asia's largest plastics processing industry, with 4,000 companies, and a strong local presence of factories of global car and electronics manufacturers.
"The framework is very good, they have enough feedstock here and they have big players here like PTT," said Michael Carus, managing director of bio-economy consulting firm Nova Institute GmbH in Hurth, Germany, in an interview after his speech.
"I think we are all waiting as to the next steps for investment," he said. "I think Thailand is in a very good position and if the Asian countries, Malaysia, Indonesia, Thailand, build this community in the next years, they have a real chance to grow."
Beyond investing in NatureWorks, PTT is currently building a joint venture plant in Thailand with Japan's Mitsubishi Chemical Co. to make bio-based polybutylene succinate.
The conference, held Jan. 24-Jan. 26, also saw several plastics processors disclose investments.
Firms from Norway and Taiwan, for example, said they were partnering with Thai firms on bioplastics to take advantage of both Thai processing expertise and anticipated supplies of locally produced biopolymers. Thai companies also were adding capacity themselves.
Boning up on bioplastics
The president of the Thai Bioplastics Industry Association, Pipat Weerathaworn, said he expected announcements of other large bioplastics projects in the country, although he cautioned in public comments at the conference that local plastics processors need to beef up their capabilities to take full advantage.
"We have many converters in the bioplastics business but we have to improve and train them to be capable for the bioplastics business," he said.
That seemed to be reflected in presentations at the conference. Thai firms, for example, were generally focused on bioplastics packaging, but were not involved much in using bioplastics in more precision applications such as parts for cars or consumer electronics, in contrast with work being done in Japan and discussed by several Japanese presenters.
Thailand and Southeast Asia also lack domestic demand for bioplastics applications to reduce dependence on exports, and need to do more to develop local markets, several presenters said.
"I'm sorry to say but I won't see any opportunity to sell my bag locally," said Pisuth Lertvilai, deputy managing director at Bangkok-based Multibax Public Co Ltd., which is doubling capacity for its bioplastic bags. "The Thai government should find somebody to be the pioneer using bioplastics. An example would be to let the Bangkok metro government start composting food waste."
Bioplastics can also help the Thai government achieve one of its social goals of reducing income inequality, because it will give farmers more valuable end markets to sell their crops, said Arkhom Tempittayapaisith, secretary general of the National Economic and Social Development Board in Bangkok.
Also, it's seen as a way for Thailand to upgrade its industrial base.
"Thailand is no longer a cheap-labor economy," he told the conference. "We need to move up the value chain in our economy to compete in world markets."
Bioplastics activity in Thailand is attracting attention around the world, NatureWorks' Verbruggen said in his speech, as governments study how best to support their own biopolymer industries.
"If I'm talking in the United States or Europe or Australia or Korea, Thailand is mentioned as a country that not only has the vision — believe me a lot of people in Europe have vision — but who also have the implementation program, looking at investments, looking at infrastructure, looking at research and development," he said.