Teijin Ltd. has ended its involvement in the NatureWorks LLC polylactic acid bioplastics business, transferring its 50 percent share over to its joint venture partner, Cargill Inc.
The move, made final June 30, is part of Teijin's restructuring of its global business, instigated by the economic slowdown, according to the Osaka, Japan-based firm.
Minnetonka, Minn.-based NatureWorks was set up in 1997 as a joint venture between Minneapolis-based Cargill and Dow Chemical Co. of Midland, Mich. Teijin took a 50 percent share in the venture in 2007, following Dow's decision to exit the business.
The NatureWorks manufacturing plant in Blair, Neb., is currently the world's largest PLA bioplastics production plant. The company recently started a second polymerization line at the site, upping capacity to about 309 million pounds a year.
In a statement, NatureWorks CEO Marc Verbruggen said the Teijin decision will have no effect on his firm's day-to-day operations. He said NatureWorks retains strong growth prospects for its Ingeo-brand bioplastics.
While the economic downturn slowed sales growth, we still show growth, which can't be said of many conventional materials today, he said. Sales have notably rebounded since January a clear demonstration that the Ingeo product traits and environmental advantages are important to customers even in times of lower oil prices.
Earlier this year, Verbruggen put sales at close to 154 million pounds per year, but that growth had been slowed by the widening price gap between its Ingeo product and conventional petrochemical-based plastics, as a result of the slump in commodity plastics prices.
Natureworks cut around one-third of its staff in March, while also announcing that it was evaluating the launch of a second manufacturing plant. Verbruggen said then that a second plant to be located outside of the United States could be required as early as 2013.
Teijin said the decision to exit the Natureworks venture did not indicate its lack of commitment to the bioplastics sector. Teijin said it plans, instead, to focus its commercial and technological resources on developing its BioFront heat-resistant PLA polymer.
Teijin believes that cooperative efforts among industry players are essential for continued market expansion going forward and intends to maintain co-operative relations with NatureWorks and Cargill, which share the same belief, said a Teijin news release.
Teijin, which is active in the synthetic fibers, plastic films and pharmaceuticals sectors, posted consolidated 2008 sales of 943 billion yen ($9.75 billion).
In April, the company announced plans to drastically restructure some of its plastics businesses, including its PET film and fibers and polycarbonate resin. It also said it would freeze major capital investment for two years and cut capital spending for 2009 by almost 50 percent.
Teijin said the cost of the NatureWorks ownership transfer was included in its fiscal 2008 results, and will have no impact in the current fiscal period.