Cardia expands bioplastics production in Nanjing, China

By Steve Toloken
News Editor / International

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
Companies & Associations

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
News Editor / International

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

Dow Chemical to merge chlorine operations with Olin

March 27, 2015 12:43 pm ET

Dow Chemical Co. is combining a large part of its chlorine value chain with specialty chemicals and ammunition maker Olin Corp. to create a global...    More

Image

Eastman Chemical expanding Tritan co-polyester capacity

March 27, 2015 10:00 am ET

Eastman Chemical Co.'s Tritan-brand co-polyester business continues to grow, with 35 million pounds of capacity added late last year and a second...    More

Image

PolyOne's Patterson focused on keeping the momentum going

March 27, 2015 9:30 am ET

New PolyOne CEO Robert Patterson sees a lot of good things when he looks at his company, which ranks as North America's largest compounder and...    More

Image

Improvements to Radici's nylon line takes it into more applications

March 27, 2015 9:00 am ET

Radici Group, the Italian-headquartered materials firm, outlined the benefits of its Radilon and Radistrong nylon products at NPE 2015.    More

Sun Plastech, Plastics Color Corp. note major milestones at NPE

March 27, 2015 9:00 am ET

Sun Plastech Inc. and Plastics Color Corp. — two well-known materials firms — are marking anniversaries at NPE 2015.    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