Cardia expands bioplastics production in Nanjing, China

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: February 18, 2014 12:50 pm ET
Updated: February 18, 2014 12:53 pm ET

Related to this story

Topics Materials, Sustainability, Packaging, Extrusion, Film & Sheet, Materials Suppliers

Australian firm Cardia Bioplastics Ltd. is doubling capacity at its manufacturing plant in China, as the company said it has secured orders to supply an expansion of the organic waste diversion program in the city of Nanjing.

Cardia said Feb. 14 it will add three film extruders and bag making machines at its factory in Nanjing, Jiangsu province, with plans for an additional three production lines there by the end of the June.

The Melbourne-based company maintains its sole manufacturing plant globally in Nanjing, where it said the government has been steadily expanding its organic waste diversion efforts.

The new investment comes, however, as the company replaced its chairman and restructured in the second half of 2013, with the goal of turning around losses.

While it faces that difficult fiscal position, Cardia said its capacity expansion is needed because of increasing demand for compostable and reduced carbon footprint packaging from global brands and local governments.

“The market dynamics are shifting,” said Frank Glatz, Cardia’s managing director, in a statement. “Over the past few years brand owners, retailers and packaging companies have commenced using bioplastic resins, films and packaging to replace conventional plastics.”

Local governments are also increasing their efforts to divert organic waste from households and industry to composting, increasing demand for compostable bags, the company said.

Each production line in Nanjing will add 1.5 million bags per month capacity.

The company said the new contract with the Nanjing city government will be worth A$250,000 for the first quarter, with a forecast of A$1 million a year, representing about five percent of the households in the city of 6 million.

The contract, which is with the Jianye District in Nanjing, is to supply the company’s garbage bins and kitchen waste bags with its “Biohybrid” resins.

Cardia said Jianye is the first district to have a full commercial roll-out of organic waste diversion but it said other district governments in Nanjing are “expected to progress to full-scale implementation.”

It also said it has a contract, worth about A$1.2 million annually, to supply about 20 percent of the households in Shanghai’s PuDong district with its bags and products.

The company also announced new business last week with the Ricoy supermarket chain in Brazil. Several states in Brazil have recently banned standard plastic carrier bags, accelerating demand for its products, Cardia said.

In its most recent filings to the Australian Stock Exchange, the company said sales in the fourth quarter were up 35 percent, to A$1.22 million, compared with the previous quarter.

But it also noted that its profit margins had declined in its fiscal 2013 and it lost money, as it was forced to outsource production to meet additional demand in China. It said it expected the Nanjing capacity expansion to help improve margins.

The Feb. 14 announcement of the investment in Nanjing comes after the company last year shook up its board, appointing a new chairman, Richard Tegoni, with the goal of bringing the company to profitability.

“The company has a clear priority which is to achieve breakeven and become a sustainable business,” Tegoni said in a statement in November. “Bioplastics is an emerging market and although this represents an extraordinary opportunity we must understand the challenges facing us and how to navigate the path ahead so that the journey to profitability becomes a reality.”


Comments

Cardia expands bioplastics production in Nanjing, China

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: February 18, 2014 12:50 pm ET
Updated: February 18, 2014 12:53 pm ET

Post Your Comments


Back to story


More stories

Proposed Shell project draws more than 1,000 to informational meetings

April 17, 2014 2:03 pm ET

More than 1,000 people attended a pair of public meetings hosted by Shell Chemical LP on April 16 to discuss the possibility of building a major...    More

Image

Hedging can slow the resin rollercoaster

April 17, 2014 3:00 pm ET

The good old days — if they even ever existed — are gone, and.Andy VanPutte thinks volatility in the resin market is here to stay and...    More

Spain's Cristian Lay Group buys two materials units of bankrupt LSB

April 17, 2014 11:11 am ET

Spanish industrial conglomerate Cristian Lay Group has purchased two of the bankrupt Spanish PET packaging group La Seda de Barcelona.    More

EU moving closer to rules that will reduce plastic bag use by 80 percent

April 17, 2014 10:54 am ET

European Union countries could have to reduce the use of plastic shopping bags by at least 80 percent by 2019 under draft rules backed by the...    More

Image

Polyair rebuilds from Sandy with help from Process Control

April 16, 2014 4:11 pm ET

Hurricane Sandy gutted Polyair Inter Pack Inc.'s Carlstadt, N.J., plant more than a year ago, and Brian Clawson won't soon forget the devastation.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events