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
Companies & Associations

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

Flextronics launches global injection molding, tooling unit

March 26, 2015 4:29 pm ET

Flextronics International Ltd. (Booth S34125) is officially launching Precision Plastics, a global injection tooling and manufacturing unit, as a...    More

Image

Kautex showing off an extrusion blow molding machine at NPE

March 25, 2015 6:00 am ET

After 80 years in business, Kautex Maschinenbau GmbH officials know good old-fashioned word of mouth is often the best way to reach more customers.    More

Image

Fabri-Kal to expand its sustainable packaging with new Idaho plant

March 20, 2015 2:03 pm ET

Thermoformed packaging company Fabri-Kal Corp. plans to tap into Idaho's farming community to expand its sustainable packaging program.    More

Silgan picks Hazelwood, Mo., for plant

March 20, 2015 11:32 am ET

Silgan Plastics has reportedly selected the location of its second new plastics container plant.    More

Image

Advances in barrier injection molding highlighted at NPE

March 17, 2015 10:39 am ET

It's a Holy Grail of plastics: Clear, coinjection molded containers to replace metal cans, the common “tin can” produced by the billions e...    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events