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November 21, 2005 01:00 AM

NatureWorks' corn-based PLA makes inroads

Frank Esposito
Senior Staff Reporter
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    After almost a decade of promoting bio-based plastics, NatureWorks LLC may be ready for its close-up.

    The Blair, Neb.-based unit of Cargill Inc. has been making corn-based polylactide resin at a 300 million-pound-capacity plant in Blair since 2002. Recent upswings in the cost and availability of standard petroleum-based resins have brought PLA to a price-competitive level - ranging between 75 cents and $1.50 per pound - with PET and polystyrene, leading more plastics processors to take notice.

    Announcing a major supply agreement with mega-retailer Wal-Mart Stores Inc. - for PLA use in containers for produce, herbs and other products - doesn't hurt, either. NatureWorks followed up the mid-October Wal-Mart announcement with an early-November revelation that produce leader Del Monte Fresh Produce NA Inc. would increase its use of NatureWorks PLA in packaging for pineapple, melons and fruit and vegetable medleys.

    In short, these are exciting times for NatureWorks and for global commercial director Snehal Desai.

    ``The Wal-Mart deal gets us to where we had to be in order to be considered real,'' Desai said at Commercializing Bioresins 2005, an industry conference held Nov. 7-9 in Atlanta.

    ``It lets customers know that we can take on their volume,'' he added.

    Desai added that NatureWorks is focusing its PLA marketing efforts on drinking cups, deli and produce containers and other packaging uses where its resin ``can function and compete on price.''

    ``Today, we can think of ourselves in terms of PET in density and price,'' he said.

    NatureWorks said its PLA biodegrades in 47 days when placed in a standard municipal compost, and uses natural resources instead of fossil fuels. The price of a bushel of corn has remained around $2 since 2000, while prices for crude oil and natural gas, in cubic feet, has more than tripled since then.

    ``The fact that we can talk about a contract price for a year is unusual in the plastics industry right now,'' Desai said. ``In the long view, price stability has some economic benefit for brand owners.

    ``And why would you use a very precious material [like oil and natural gas] for something rather pedestrian like packaging? When you do that, you're using a resource that took a million years to produce to make packaging products that will be around six weeks or six months.''

    NatureWorks' PLA also is used in containers for Newman's Own salad dressing and bottles for Biota drinking water.

    Wal-Mart also benefited from beginning its work with NatureWorks a year ago, when PET and PS were experiencing late-year price spikes; the firm then was able to move quickly when prices shot up again in late summer 2005.

    ``Wal-Mart went after applications that just made sense,'' Desai said. ``And they've socialized [PLA] into their buying structure. It's not just one person buying the material.''

    And although NatureWorks no longer focuses on ``sustainability'' when pitching its products - Desai said the term caused confusion among customers - consumers are beginning to expect brands to take small, environmentally responsible steps on their behalf.

    ``There are consumers out there looking for responsible brands,'' he added.

    In spite of the recent surge in interest, Desai said NatureWorks has ample PLA capacity available and currently has no plans to expand.

    NatureWorks was a 50-50 joint venture between Cargill and Dow Chemical Co. from its 1997 launch until January, when Cargill bought out Dow's stake.

    When asked about Dow's exit, Desai said he believes Dow had other priorities, such as expanding in China and the Middle East. He noted that Dow also recently exited the DuPont Dow Elastomers LP joint venture.

    ``Being a private company, Cargill had the ability to stay with [PLA] longer,'' said Desai, who joined NatureWorks in 2003 after a 16-year career at Dow.

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