CHICAGO (Aug. 1, 4:55 p.m. EDT) — A burst in applications and the development of new organic and corn-based bioresins and industry partnerships are painting what looks like a bright picture for an industry that just a year ago was greeted with some skepticism:
* NatureWorks LLC of Minnetonka, Minn., announced at NPE 2006 in Chicago that the Noble juice label, which is a distributor to Wal-Mart Stores Inc., will begin using polylactide single-use juice containers next month, and that Highland Laboratories Inc. of Mount Angel, Ore., will become the first dietary supplement manufacturer to use PLA for its product packaging. NatureWorks got a boost last fall when Wal-Mart shifted to polylactide acid-based packaging for gifts cards and the 100 million produce containers it uses annually.
* Metabolix Inc. of Cambridge, Mass., said Archer Daniels Midland Co. in Decatur, Ill., will break ground later this year on a plant it is building in Clinton, Iowa, to produce 100 million pounds of PHA, or polyhydroxyalkanoate, grown in fermentation vats using sugar and microbes and Metabolix tech-nology. The plant is expected to be operating in the summer of 2008.
* BASF Corp. said production will begin later this year on its Ecovio resin — made from PLA and its polyester-based Ecoflex-brand resin — with some of the first applications expected to be in compost bags and packaging films.
* DuPont Co. of Wilmington, Del., is scheduled to roll out its first two bioresins next year as part of an initiative to derive 25 percent of its sales from products made with renewable resources by 2010, with the feedstock produced at a plant in Loudon, Tenn., that is a joint venture with Tate & Lyle LLC of London.
“This is just the first big wave that is occurring,” said James Barber, Metabolix president and chief executive officer, in an interview at NPE. “Bio-based materials are just now emerging. People shouldn't think that what they have seen so far is the extent of where bioresins can be used. The capability is going to continue to grow and people will be amazed and delighted at the range of properties and type of applications that will emerge for bioresins.”
What's more, bioresins, even with an estimated annual global production capacity of 750 million pounds — miniscule when compared to the 15 billion pounds of petrochemical-based resin capacity added annually — appear to be moving into the mainstream.
“The change in dialogue is pretty dramatic in terms of having a conversation with a traditional plastics industry CEO and finding out that [bioresin] is on their radar,” said Snehal Desai, global commercial director of NatureWorks.
The company has averaged 45 percent growth in the past four years and increased its customer base 100 percent in the past 30 months, he said.
Part of that growth is being driven by sustainability initiatives from retailers like Wal-Mart and food chains and legislative initiatives to reduce waste going into waterways and landfills. But the larger driver appears to be oil prices of $70 per barrel that are expected to go even higher.
“Price changes everything,” Desai said. “The mind shift has as much to do with people saying I don't think [the upward swing in oil prices] is going to stop as anything else.”
Keith Edwards, marketing director for bio-based and bio-degradable resins at BASF Corp. in Florham Park, N.J., agrees. “Along comes higher prices for oil and gas and companies start talking about sustainability because no one believes that oil is going back to $35 a barrel. And they are beginning to think that they can get lower prices long-term because you can grow more corn and wheat.”
Unlike initially, said NatureWorks' Desai, “applications are exploding very fast” in everything from gift cards to coat hangers, sunglasses to produce packaging and bottled water, and blister packs for such items as electronic products and baby wipes.
“The most traction is in food packaging, rigid containers and blown and oriented film products,” as well as water bottles, where NatureWorks supplies resins for water bottles for U.S.-based Biota-brand water and Belu Natural Mineral Water in London.
Desai also said paper coating and fibers and nonwoven products were two other “sweet spots” for PLA applications. The company also said it hoped to continue to ride the wave of the organic food trend in the United States, where growth is 15-18 percent annually and being driven by grocers such as Wild Oats and Whole Food.
But despite the growing number of applications, he said “nothing official was on the drawing board” for a possible expansion of the current 300 million-pound-capacity plant in Blair, Neb., or for a second plant. “We are making sure that we have a series of applications that truly have legs before embarking on any expansions,” Desai said. “We want to be confident that we have a handful of applications” with significant volume levels, he said.
With the industry growing, the companies, at this point, aren't concerned about competition from their fellow bioresin manufacturers, even though some of them are pursuing the same end markets. They also expect other companies to follow their own paths to make corn-based and bio-based resins suitable for their applications.
“Companies are often going down the additive route to improve PLA for certain applications,” Desai said. Likewise, BASF's Edward said he “expects to see a continued expansion of blends and compounds,” as bioresin application use develops.
“We see ourselves as happy travelers along the same path,” Desai said, echoing a similar comment from Metabolix's Barber.
“These two bioresins [PLA and PHA] will not be competitive with each other, but will be much more complementary,” Barber said.
The resins' properties are different and products made from PHA will decompose or degrade in anywhere from 60 days to 24 months, depending on the density of the product and whether it is in ground water, soil, rivers or municipal treatment plants. PLA resins only decompose in industrial compost facilities.
“If you are worried about plastics ending up in waterways and bays, the PHA resin offers a solution,” Barber said.
He said Metabolix was working with companies on applications of PHA for use in agriculture, packaging, single-source items used in food service and in electronics, where there is an interest in PHA-housings because of a growing number of regulations in Europe, Canada and the U.S. that require companies to take products back at their end-of-life.
In agriculture, the most interest is for stakes to grow crops and film-type mulch that biodegrades. In packaging, he said there is interest in caps and closures and other products where the plastic is used for just a short time; and in bags, because of a concern over litter in waterways, a reluctance to switch to paper because of weight concerns and the ability of PHA bags to biodegrade on their own.
“We are seeing strong traction in each of these areas,” Barber said, with “a lot of interest in electronic housings.” He added that there is also interest from the automotive sector for some interior products, and from durable good manufacturers and the construction industry.
“I think that if we were sitting here 25 years from now, we would find that bioresins and natural plastics would be a significant element of the plastics industry,” Barber said. “And five years from now, volume will be appreciable and we will begin to get a sense of the size of the industry and be on the leading edge of where it's headed. Volumes will be a significant amount 25-30 years from now.”
He also is confident that organic resins are becoming a sizable portion of that business.
“The property range of this family of materials will dramatically extend the kind of applications where they can be used compared to other bio-based resins,” Barber said.
Barber said two companies were selling agricultural stakes made with Metabolix resins, the first commercial product made from its PHA organic resins. The Earth Science division of American Excelsior Co., an erosion control products and packaging products manufacturer in Arlington, Texas, is selling the stakes to big-box retailers, construction companies and organizations interested in erosion control.
In addition, Eagle One Golf Products is selling them to golf courses. Eagle One is an Anaheim, Calif., maker and distributor of products for golf courses, parks, tennis courts and other outdoor recreation facilities.
