The biodegradable-plastics market is still developing in the United States. Despite the huge potential, the market for biodegradable plastics has a long way to go.
Whether it is a partnership, a strategic alliance, or simply a close relationship, establishment of dedicated customers is critical in this market. Working closely with customers to develop suitable applications is necessary. Technical service teams need to be involved in such efforts. Industry examples include:
National Starch & Chemical Co.'s exclusive sales tie-up with American Excelsior Co. Together, the firms develop the ultimate end users, product improvements and new products according to requirements. American Excelsior, in turn, has tied up with wine manufacturers and toy makers to supply starch sheets and loosefill.
Tie-up of Novamont SpA with Biocorp to convert and distribute Mater-Bi resins in the United States.
Cargill Dow Polymers' arrangements with Duro bags and other converters to establish a market for its EcoPLA polylactic acid resin. Cargill Dow is a joint venture of Cargill Inc. and Dow Chemical Co.
Sweetheart Cup Co.'s tie-up with McDonald's Corp. to supply thermoformed trays for packaging burgers.
Several firms are creative in the ways they educate the general public. Examples include:
National Starch, which produces starch for protective packaging applications, and works with schools to educate children, who indirectly educate their parents and the general public.
Comprehensive Environmental Solutions works with community programs and provides literature to the public about biodegradable plastics applications, such as composting.
Since the current biodegradable plastics market is small, it is necessary develop several applications to ensure better capacity utilization and lower the costs.
Later, the firm can specialize in markets in the event of increased competition. Attacking all potential markets refers to all applications and all geographic regions. The Cargill Dow venture is developing at least 10 end-user markets for its polylactic acid to justify the capacity it plans to install.
DuPont is developing global markets for its biodegradable polyester. Most of the other companies are focusing on local and European markets.
In the degradable plastics market, even large firms have formed joint ventures. Examples include:
Cargill and Dow to make and market PLA globally. This venture capitalizes on the markets of Dow and the technology and manufacturing strengths of Cargill.
DuPont and ConAgra Inc. formed EnPac to develop, license technology and sell starch-based loosefill and mold-packaging products. (DuPont has divested from this venture).
Shimadzu Corp. and Kobe Steel Ltd. of Japan together developed a plant to produce PLA at low cost.
Maintaining rapport with customers' customers is also important. This involves identifying potential end users, such as municipalities, composters, other institutions and even the general public, and conducting product trials. Such efforts also would provide input for new product development.
Venkat Ramanujam is an analyst with Frost & Sullivan, a Mountain View, Calif., research firm.