As editor of The future of bioplastics is a little fuzzier today, following Archer Daniels Midland Co.'s decision to drop out of its alliance polyhydroxyalkanoate resin company Metabolix Inc.
I included some insight into the news in the story posted on PlasticsNews.com last night:
- Metabolix reported a loss of $29.2 milliion for the nine month period that ended Sept. 30, on sales of $567,000. ADM considered the business one that was "not delivering sufficient results now," and it was "not expected to deliver sufficient results within a reasonable timeframe."
- Despite the steady news coverage of biopolymers in recent months -- remember Coke's commitment to using more bio-based resins? -- I differentiated the activity in making conventional resins made from plant materials vs. making corn-based polymers like PHA.
This morning I asked PN's two authorites on plant-based polymers, Frank Esposito and Mike Verespej, for their thoughts on the news. Here are some of our additional observations:
Metabolix and ADM started production of their Telles-brand PHA last year at a 110-million-pound-per-year plant in Clinton, Iowa. Typically that's the point where a resin takes a big step forward, when high-volume production brings down prices.
But PHA is still substantially more expensive than polylactic acid -- its main competition in plant-based resin. And lower prices for conventional plastics like polyethylene and polypropylene hurt prospects for bio-based materials, too.
Metabolix's stock price has fallen more than 40 percent today, to about $2.60 per share, following ADM's announcement.
Metabolix said it is conducting a strategic review of its business plans for 2012, and that it will restructure its bioplastics business and downsize its operations. CEO Richard Eno said the company is still "committed to successfully commercializing PHA bioplastics."
Going forward without ADM will require a major change in strategy, though.
Comments (2)
You're quite right that PHA is more expensive than PLA. I had a project a few months ago and really couldn't justify using the PHA for that reason alone.
Posted by John Spevacek | January 13, 2012 1:55 PM
Posted on January 13, 2012 13:55
Does PHA REALLY have to be that expensive?
We often follow some myths about material-price relations. What's wrong with "losing" money by charging lower prices from the get-go to get big markets? It's called "investment." A classic case is PET for softdrink bottles in ca. 1975, but there are many differences. Here, there are no big markets like the bottles ready for a change.
Maybe ADM woke up to what we've heard (and I've been saying) for a long time: People may want what looks "green" but won't pay more for it. I wonder if it can be blended/bonded w/plant-based PE or PET.
Posted by allan griff | January 16, 2012 3:55 PM
Posted on January 16, 2012 15:55