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

Large part molder EnviroTech in 'growth mode,' adds space, equipment

November 26, 2014 9:54 am ET

Salt Lake City-based EnviroTech Molded Products Inc. is adding new equipment and expanding its factory as it gains business in some of its...    More

Image

Huhtamäki selling film division

November 26, 2014 2:10 pm ET

Private equity firm Deutsche Beteiligungs AG (DBAG) will acquire the film business of Finland-based plastics packaging group Huhtamäki Oyj for 141...    More

Image

Americhem beats weather woes at start of 2014 for good fiscal year

November 26, 2014 9:45 am ET

Gains from the automotive and construction markets provided a strong fiscal 2014 for Americhem Inc.    More

Image

PE prices drop for first time in two years, PP down 5 cents

November 26, 2014 10:22 am ET

North American polyethylene buyers might want to circle November 2014 in red on their calendars — since PE prices this month have fallen for...    More

Image

SPI hopes to build on EPS recycling

November 26, 2014 6:00 am ET

Successfully recycling expanded polystyrene can be a challenge, there's no doubt about that. EPS, however, has value, is in demand and deserves to be ...    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

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

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

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

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

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

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events