Bioplastics firm moving Shanghai production to New York state

By Michael Lauzon
Correspondent

Published: July 12, 2013 2:25 pm ET
Updated: July 12, 2013 2:29 pm ET

Related to this story

Topics Packaging, Sustainability, Materials, Injection Molding, Film & Sheet, Thermoforming, Extrusion, Food service

A U.S. bioplastics company is moving production from China to a site near Rochester, N.Y., next year.

Trellis Earth Products Inc. will invest $8.3 million to set up production of starch-filled polypropylene and downstream products in a former 80,000-square- foot Eastman Kodak facility in Gates, N.Y.

Trellis Chief Operating Officer Craig Mittelstaedt said in a telephone interview that costs of producing in China have risen dramatically, convincing the firm to move production to the United States.

Trellis sources its patented bioplastic products from two companies in Shanghai. When the firm was founded, in 2006, it calculated production in China was less costly than making products in North America.

“In 2006 to 2010 prices in China began to rise, the cost of trans-Pacific transportation was rising and transportation within the United States rose dramatically,” Mittelstaedt said.

“We looked again at our business plan and U.S. manufacturing looked good,” he said.

Trellis looked at several states to partly fund its new U.S. operation and New York state “was highly motivated and looking for green, high-technology companies. We fit the bill,” Mittelstaedt recalled.

The search and negotiations with New York took about a year before Trellis settled on the former Eastman Kodak plant. A plant in the eastern U.S. is close to the market concentration for bioplastics and to resin sources in Texas and starch sources in the Midwest, he said.

Rochester needs new jobs and so the city was keen on landing a new company. The facility Trellis will lease had once been a plastics plant and has much of the infrastructure and plant equipment already in place. As well, Rochester has a skilled workforce that could get up to speed at Trellis quickly, he said.

Trellis will start with compounding, sheet production and injection molding in Rochester, followed by thermoforming late next year. Film will continue to be sourced from China but Trellis eventually plans to extrude it in Rochester.

Trellis will be vertically integrated in Rochester from compounding to processing, to make products for packaging and other markets.

Trellis, with headquarters in Portland, Ore., eventually will move its head office to Rochester but will maintain a distribution center on the West Coast to serve substantial markets there.

As the bioplastic market has evolved, customers have been urging price parity with plastics derived from fossil fuels, which puts cost pressure on Trellis, Mittelstaedt said. Some customers, such as institutions, also prefer made-in-the-USA sourcing.

Trellis planned to launch an initial public offering in 2010 on Nasdaq but market conditions deteriorated and the firm withdrew its plan last year. The company is privately held and Mittelstaedt is a minority investor.

New York’s Empire State Development agency will provide $1.5 million in tax credits and a $500,000 capital grant based on jobs creation and contributions to the local economy. Trellis has committed to creating 189 jobs by June 2018.

Monroe County agreed to $500,000 in low-interest financing, up to $300,000 in an interest subsidy, $50,000 for training, and possible rebates on equipment purchases.

“This move demonstrates all of what New York has to offer for businesses to succeed, including a talented workforce, state and local support, top locations and access to major markets,” New York Gov. Andrew Cuomo said in a news release.


Comments

Bioplastics firm moving Shanghai production to New York state

By Michael Lauzon
Correspondent

Published: July 12, 2013 2:25 pm ET
Updated: July 12, 2013 2:29 pm ET

Post Your Comments


Back to story


More stories

Image

P&G removing PE microbeads from its Crest brand toothpaste

September 18, 2014 1:57 pm ET

After months of prodding, Procter & Gamble Co., the makers of Crest brand toothpastes, say polyethlene microbeads will be completely removed from its ...    More

Image

Bayer spinning off plastics business

September 18, 2014 8:49 am ET

Bayer AG will spin off its MaterialScience plastics group into a separate, publicly-traded company within the next 12 to 18 months.    More

Image

Bill Kent named Thermoformer of the Year

September 18, 2014 12:11 pm ET

Bill Kent flew 6 million miles in a 50-year career at Brown Machine LLC — where he began assembling thermoforming machinery on the factory...    More

Image

Nolato Contour beefs up white room molding capabilities

September 18, 2014 11:56 am ET

Nolato Medical has extended its controlled environment options to include a white room at its Baldwin, Wis., Nolato Contour plant.    More

Image

PET to PET boosts recycling capacity

September 18, 2014 11:14 am ET

PET to PET Recycling Austria GmbH, a bottle-to-bottle PET recycling operation backed by Coca-Cola Hellenic Bottling and several beverage manufacturers...    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook – North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events