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

Image

China's Shide Group, BASF unveil 'revolutionary' all-plastic window profile

April 23, 2014 9:10 pm ET

SHANGHAI — The PVC window profile market in Asia is expected to increase four-fold by 2025, and Chinese building products maker Dalian Shide...    More

Worker dies in fall at Formosa Texas plant

April 23, 2014 4:04 pm ET

A subcontractor died April 22 after falling 25 feet during routine cleaning operations at a Formosa Plastics Corp. USA facility in Point Comfort,...    More

Image

Milliken expanding SC plant for additional PP clarifying agent capacity

April 23, 2014 3:42 pm ET

American chemical company Milliken & Co. has announced plans for a major expansion in capacity for its Millad NX8000 clarifying agent for...    More

Clariant says Asia holds the key to growth

April 23, 2014 3:52 pm ET

Clariant AG is based in Switzerland, but its eyes are firmly focused further east.    More

Image

How CEO Santi is changing ITW

April 23, 2014 2:48 pm ET

Scott Santi is showing he can do more than just cut costs at Illinois Tool Works Inc.    More

Market Reports

Market Data Book - Rankings & Lists

A one-stop download of Plastic News' exclusive annual lists and processor rankings containing essential data including sales, employees, end markets, materials and more.
EXCLUSIVE EXCEL FEATURE: full mailing address details for available plant locations.

Learn more

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

Mold Making and Tooling Review and Outlook 2014 North America

This report provides in-depth analysis of the mold and toolmaking market for North America, including discussions of trends, opportunities, threats, the latest developments in production and labor and equipment trends impacting moldmakers.

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