Call it, if you will, a Tale of Two Bioplastics Markets. On the one hand, positivity toward making plastics from natural resources — or ones that naturally biodegrade — never may have been higher than it was at
NPE2009 in Chicago earlier this summer. More than three dozen bioplastics firms were there, looking to capitalize on a wave of interest that peaked in mid-2008 when the price of oil approached $150 per barrel. That frightening price level sent retailers and manufacturers of all stripes scrambling to find materials not based on petroleum — like most standard plastics are.
Things were looking good for the likes of NatureWorks LLC, Metabolix Inc., DuPont Co., Cereplast Inc. and other firms that have championed the bioplastics cause. Executives with these and other firms scarcely could restrain their optimism.
NatureWorks has become the front-person for the North American bioplastics field by virtue of being the first to build a large plant actually making bioplastics on a commercial scale in the region. NatureWorks President and CEO Marc Verbruggen recently said his firm should be at 300 million pounds of capacity by 2012 and could hit the billion-pound mark as soon as 2014.
But there's always that pesky other side of the story.
That's the side that points out that Cereplast has lost more than $25 million in the last two years and has needed to patch together additional financing to stay afloat. The firm also has decided to end its manufacturing operations in California, and won't open a just-built plant in Indiana, opting instead to use toll producers.
Cereplast is doing so in spite of a market that says it's open to bioplastics, and in spite of the efforts of always-optimistic CEO Frederic Scheer. Scheer leads the market in perseverance, since he's been working to commercialize bioplastics at Cereplast and its predecessor companies for almost 20 years.
The financial picture at Metabolix is similar, with a two-year loss of more than $60 million. Launch of the firm's first commercial plant in Clinton, Iowa — through its Telles joint venture with agriculture giant Archer Daniels Midland — also has been delayed until later this year.
So is it price? Performance? What's kept the bioplastics field from greater success?
Price remains at the mercy of the oil field. A bioplastics researcher at Iowa State University recently told PN that oil has to be above $70 per barrel for bioplastics to be competitive. But oil fell under that level in October and — with the exception of a few days in June — has stayed there since. It closed at less than $64 on July 29.
Performance has improved. Modern bioplastics aren't as brittle as their predecessors. In many cases, the materials are competitive with PET and polystyrene.
Is it trust? Mega-retailer Wal-Mart was an early champion of NatureWorks' material, using PLA in fruit containers, but that didn't lead to a wave of imitators. Wal-Mart now has issued a sustainability index, by which it will judge products in such areas as energy and climate, material efficiency and natural resources. This would seem to give another edge to bioplastics.
But if fear of Wal-Mart doesn't drive customers into the lobbies of bioplastics makers, the industry might have bigger problems than the price of oil.
Esposito is an Akron, Ohio-based Plastics News senior reporter.