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

It's becoming a seller's market for plastics firms

January 27, 2015 11:37 am ET

The pace of plastics mergers and acquisitions activity slowed a bit in the second half of 2014 — but market watchers have high expectations for ...    More

Image

Schulman, Citadel continue buying blitz

January 27, 2015 11:32 am ET

A. Schulman Inc. and Citadel Plastics Inc. — two deal-happy materials firms — were at it again in the second half of 2014.    More

Image

Materials market sees more deals

January 27, 2015 11:26 am ET

Plastics materials deals showed modest growth in 2014, increasing 6 percent vs. their 2013 total.    More

Image

UK legislators reject fracking moratorium

January 26, 2015 12:19 pm ET

UPDATED: Environmental campaigners turned their anger on the United Kingdom's Labour party Monday after a vote to impose a moratorium on fracking...    More

Image

Major packaging merger includes plastics operations

January 26, 2015 12:24 pm ET

A merger of packaging companies MeadWestvaco Corp. and Rock-Tenn Inc. will create a new company with nearly $16 billion in annual sales.    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

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

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

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

More Events