Bioplastics maker Cereplast Inc. has chosen Seymour, Ind., for the location of its Midwest production plant.
Hawthorne, Calif.-based Cereplast will operate out of a 110,000-square-foot building in Seymour. The site initially will be used to warehouse bioplastic compounds made in Hawthorne.
Cereplast expects to have a pair of extrusion lines running at the site by mid-2008, Chief Executive Officer Frederic Scheer said in a Dec. 10 phone interview.
``We looked at several locations in different states,'' Scheer said. ``Indiana was extremely aggressive in its incentive package and was very responsive.''
The site will create 90-95 jobs in 2008 and a similar number in 2009. The Indiana Economic Development Corp., a state agency in Indianapolis, will provide Cereplast with $665,000 in tax abatements over a 10-year period.
The state also is providing $200,000 to pay half of the cost of a rail upgrade at the site.
Scheer added that Cereplast will benefit from closer access to the agricultural raw materials - such as corn, tapioca, wheat and potatoes - that are used in the firm's bioplastics lineup.
A second 110,000-square-foot-building is expected to be built at the 12-acre site. When the entire complex is complete in early 2010, Cereplast officials said it will have 500 million pounds of bioplastic production capacity, making it the world's largest such facility.
The first products made in Seymour will include Biopropylene, a ``hybrid'' bioplastic that combines 50-70 percent organic starch with a traditional homopolymer polypropylene. Cereplast commercialized the material in Hawthorne earlier this year. Biopropylene is moving beyond Cereplast's traditional food-service markets and into markets such as automotive and cosmetics, officials said.
Bioplastic compounds made using polylactic acid resin sourced from NatureWorks LLC eventually could be made in Seymour as well, Scheer said.
Production in Hawthorne - currently at 45 million pounds annually - will remain intact after the Seymour site opens, according to Scheer. But he sang the praises of Seymour, a city of about 19,000 in southeastern Indiana, roughly located between Indianapolis and Louisville.
``We found exactly the building we were looking for and the acreage we needed to grow the business,'' Scheer said. ``We're right in the core of the Midwest, about 3½ hours [driving] to Chicago and four hours to Detroit.
``We'll also be able to reduce our carbon footprint, and our electrical, labor and land costs will be substantially lower.''
In a news release, Indiana Gov. Mitch Daniels said Cereplast ``is exactly the kind of business that [Indiana] is most interested in attracting.
``A unique company like this that has market-changing possibilities and the potential for rapid growth is a big win for Indiana,'' he said.
The site initially will have a pair of extrusion lines, but eventually will house 10. Scheer said the size of the extrusion lines used by Cereplast also is increasing, from models with diameters of 35 millimeters and 65mm, to ones of 105, 135 and 165mm.
In the first nine months of 2007, Cereplast posted sales of $1.6 million - almost four times its sales from the same period in 2006 - but the firm had a loss of almost $5 million.
Scheer - who's been working in the bioplastics field for more than 15 years - remains upbeat about the outlook for the product, especially with recent interest in ``green'' products.
``With the hybrid products entering the market, I think that bioplastics are starting to become mainstream,'' he said. ``I wouldn't be surprised to see additional expansions of large capacities from other companies and from our company as well.
``With the price of oil going up, it makes more sense to use these bioplastic materials.''