The Chinese government's restrictive policy on plastic shopping bags is forcing some low-end bag makers to close, but it is also boosting some businesses. Biograde Nanjing Pty Ltd. of Nanjing is one of them.
``Eighteen years is how long we've been trying to promote degradable and biodegradable products,'' sales manager Yang Xuyan said in an interview at the Chinaplas show. ``Investors come and go ... finally this year we are really seeing the light at the end of the tunnel.''
The company makes degradable resins - a mix of 35 percent corn starch and high density polyethylene - as well as biodegradable resins that are made of starch and other bio-based materials. She declined to specify the other materials.
Biograde Nanjing is the sole Chinese manufacturer in a pool of international finalists to supply biodegradable bags to the Beijing Olympic Games, a local newspaper Nanjing Daily reported. The company also said it's the only Chinese firm whose biodegradable products have met the U.S., European Union and Japanese standards for biodegradable products.
``Considering production and transport costs, we are leaning toward domestically made products, as long as the sample test results meet our standards,'' the Beijing Olympics procurement office told Nanjing Daily.
Biograde Nanjing's degradable and biodegradable resins come in a variety of grades for different processes, including injection molding, blow molding and foam-making.
``We make more than 700 metric tons [1.5 million pounds] every month,'' Yang said.
After a number of ownerships changes over the years, the company now is a fully owned subsidiary of Victoria, Australia-based Biograde Ltd. The parent company helps market the products - made in Nanjing - in Australia and New Zealand. Its Hong Kong branch is selling to other international markets.
The Chinese market for alterative packaging is starting to take off with the bag ban, Yang said.
To demonstrate the speed of market growth, Yang compared the sales in 2007 and 2008.
``Our entire annual sales of 2007 were 10 million yuan [$14 million], but we've already reached that number only by the first quarter this year.''
In order to cater to the booming demand, the company also is making finished products both in-house and through contractors. Four blow molding machines came on stream in March for production, to supplement the two machines that are used for testing. The operation is highly automated, she added.
The company now supplies biodegradable carrier bags to retail giant Suning Appliances Co. Ltd., which swiftly replaced conventional plastic bags with paper bags after the bag ban was announced in January. The ban of ultrathin (less than 25 microns) plastic bags and ending of retailers giving bags away for free was set to take effect June 1 in China.