Hong Kong-based compounder Ngai Hing Hong Co. Ltd. has launched a unit to make biodegradable polymers, after acquiring a local startup firm.
The firm started its NHH Biodegradable Plastics Co. Ltd. division Aug. 1, using its existing factories in mainland China to produce compounds made from polylactic acid and other resins.
NHH bought small Hong Kong firm Star Trade Ltd. for undisclosed terms, said Anthony C.Y. Wong, vice chairman and director, in an interview at K 2007 in Dusseldorf.
NHH uses its existing manufacturing capacity at several of its China plants for the biodegradables work but may add dedicated capacity in the future, Wong said.
Increased environmental pressures on plastic and moves by retailers toward sustainable packaging are boosting demand, although the material's potential remains hampered by supply, price and performance challenges, NHH officials said.
``There are customers waiting, and they are willing to pay a premium but the problem is biodegradable performance is poorer than traditional plastics,'' said John Leung, general manager of the NHH Biodegradable Plastics unit and one of the founders of Star Trade.
He said performance challenges include areas like yogurt cups, where some food manufacturers would like to use it but find it may not hold up to their sterilization processes.
NHH is working with equipment manufacturers to improve manufacturability, including overcoming challenges with twin-screw extrusion, which creates a lot of friction and heats up the material to a point where it is harder to process, he said.
There are three Chinese makers of PLA today, operating with fairly small-scale production and that should grow to at least eight by 2010, Leung said. U.S.-based NatureWorks LLC makes the vast majority of the world's supply, he said.
He said all NHH materials meet the three main standards for biodegradability: EN 13432, ISO 14855 and ASTM 6400.
``I think it is the right time for biodegradable materials,'' Leung said. ``The market worldwide is almost doubling every year, but the supply cannot catch up.''