A Malaysian licensee for packaging producer EarthShell Corp. has signed an $11.8 million contract to buy equipment from DT Industries Inc.
Equipment from Dayton, Ohio-based DTI will be used to manufacture a line of plates and bowls in both the United States and Asia, said John Nevling, director of product management and environmental affairs for EarthShell, based in Santa Barbara, Calif. The equipment contract is the first for a product using the EarthShell concept.
EarthShell wants to commercialize a line of food-service disposable packaging made primarily from a combination of natural limestone and potato starch. The products from the start-up research company are designed to replace traditional polystyrene and paper products.
The company plans to begin manufacturing bowls and plates from the material this year through a series of licenses, Nevling said. EarthShell also is testing a clamshell package for restaurants but has not said when that product will be on the market.
DTI, a maker of thermoforming and automation equipment, will sell machinery to Green Earth Packaging Inc., and Green Packaging SDN BHD, subsidiaries of Malaysia-based manufacturer Dominance Inc. The companies will invest at least $30 million to build manufacturing capacity in the United States and Asia, Nevling said.
The licensing agreement, signed in December, could produce nearly two billion units annually, generating sales of about $75 million, Simon Hodson, EarthShell president and chief executive officer, said in a news release.
Manufacturing will start later this year but the locations still must be determined, Nevling said.
DTI officials, and those with its thermoforming equipment unit Sencorp Systems Inc. of Hyannis, Mass., were not available for comment before deadline Feb. 22.
The order comes at an opportune time for DTI. The company said in late January that it was in default of certain financial covenants and was seeking waivers from lenders.
DTI also announced it would close a 90,000-square-foot manufacturing facility in Rochester, N.Y., by the end of April. The facility, under its Hansford subsidiary, makes precision assembly systems for the automotive, electronic and medical markets. The facility employs 135.