After laying off employees earlier this year because of lower-than-expected sales, bioplastics manufacturer NatureWorks LLC reported that sales volumes in April and May were higher than for the same period in 2008.
Our business recovered faster than we anticipated, President and CEO Marc Verbruggen said in a July 9 telephone interview. We are experiencing a healthy double-digit growth rate.
He said a particular area of strong demand has been nonwoven and semi-durable product applications, and that he expect major brand owners to look more closely at NatureWorks' Ingeo brand of polylactic acid bioresin.
The company in mid-June began operating a second production line at its plant in Blair, Neb., that doubles its PLA capacity to 300 million pounds annually.
The big brand owners were hesitant to get involved in the past because of our capacity limitations, Verbruggen said. We are hopeful and it is our expectation that sometime in the next three months a global product brand out of Europe will announce a major product launch.
That is important because it means more volume for us, and because it gets other players interested in using PLA.
Verbruggen said the departure June 30 by Teijin Ltd. from its 50-50 joint venture ownership of NatureWorks with Cargill Inc. would not affect operations or the company's future strategy. He said he did not know whether Cargill would decide to have another partner only that that Cargill is looking at its options.
Verbrugen said Minnetonka, Minn.-based NatureWorks still plans to choose a site for a second plant by mid-2010 so that it can go online in 2013 or 2014.
In an effort to broaden its family of bioplastics resins, NatureWorks has entered into a research and development part- nership with high-through R&D firm Avantium of Amsterdam, Netherlands, to develop a new generation of polymers made from nonfood biomass with properties that are close to traditional plastics.
Meanwhile, NatureWorks is moving forward with plans for a second plant.
Assuming the global economy gets back to normal growth in early 2010, our growth will get back to 20-30 percent on an annual basis, and we will need a new plant by 2013 or 2014, Verbruggen said.
Verbruggen was not sure whether NatureWorks would be a partner or have ownership in other PLA recycling plants in North America.
But he did say that such plants would operate on a closed-loop system, with the recycler contracting with material recovery facilities for PLA bottles and contracting to sell the lactic acid back to NatureWorks.
Disposable products currently account for 60-70 percent of NatureWorks sales. But Verbruggen said that nonwoven and some film applications will have different trajectories than packaging applications as the global economy continues to recover.
Semi-durable business is getting a lot of traction, he said. But the growth of fresh food and food-service packaging will depend on what's happening with oil prices.
In contrast, he noted the interest in nonwovens, including the April introduction of a PLA tea bag by Ahlstrom Corp. of Helsinki, Finland.
Verbruggen said Frito-Lay North America Inc.'s plan to make its film-based bags of SunChips from PLA by Earth Day (April 22, 2010) is another big step in making inroads in packaging for the snack-food market.
Since last April, Frito-Lay has been making the outer layer of its 10.5 ounce SunChips bag from PLA about one-third of the bag's content.
Bioplastics also could get a boost from the cap-and-trade bills being advanced in Washington. That will make traditional plastics more expensive and, in the long-run, be beneficial to bioplastics and greatly position us for growth, Verbruggen said.
He sees NatureWorks' R&D partnership with Avantium as a possible way to extend the Ingeo brand and to develop new families of biopolymers for semi-durable and durable goods.
Verbruggen emphasized that the two companies were really starting from scratch, as Avantium has only made samples of its biopolymers in small batches.
In the first year, NatureWorks will analyze what market segments are the best fits for Avantium's furan-based biopolymers looking particularly at automotive, electronics and engineering plastics applications, he said.
Furan biopolymers are heteroaromatic compounds derived from a key intermediate molecule called hydroxyl-methyl-furfural.
Furanics have been around for awhile, but no one has stepped forward with a proposal to move it from an R&D level to a plant with commercial quantities, Verbruggen said. We intend to explore whether that is feasible.
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