Linger at the Biograde (Nanjing) Pty Ltd. factory for long enough and you'll swear that someone, somewhere, is making popcorn. The faint smell, which grows stronger as you get closer to the company's resin, is a sign that bioplastics have arrived in China.
In fact, bioplastics arrived quite a few years ago. Jacky Chen, general manager of Biograde, is quick to point out that, in a previous incarnation, his company had been working on projects since 1990, focusing on making resin suitable for thin films and plastic bags.
Until recently, however, its reception in the Chinese domestic market was chilly at best.
My company has been doing projects for 19 years, Chen said. But we focused only on the products, not on building the market.
Back then, we lost money, he said.
Known then as Hen Yan, Chen's company eventually went looking for support someone who could help it make the jump from research and development into actual sales. The Biograde Group of Melbourne, Australia, proved a good fit.
In 2006, the group bought Hen Yan and in 2007, Biograde Nanjing started marketing resin both inside China and externally.
It did not take long before the company started to grow. Chen estimates Biograde's 2008 sales were eight times greater than 2007, though he did not provide specific figures. In 2009, even in the face of the global financial crisis, Biograde has expanded its sales by nearly three times, Chen said.
With barely more than a year under its belt, Biograde was also selected to provide biodegradable plastic bags for the 2008 Olympic Games in Beijing. Olympics organizers gave the company 40 days' advance notice that it would have to provide 397,000 pounds of resin to be converted into bags in time for the opening ceremonies.
We stopped everything else, Chen said. It was a big chance for us.
Even in telling of his company's recent triumphs, Chen took a sober approach to the market for bioplastics, particularly in China.
Any developing country presents a tough market for environmentally friendly products. In the West, the marketing cachet of eco-friendly goods can sometimes offset the added costs of green materials. In China, however, more customers are unwilling or simply not able to shell out the extra cash.
In the China market, I don't think biodegradable can become the norm in the next five years, Chen said. Companies like to have a good story about their products, but the first consideration is cost.
Determined not to repeat the mistakes of Hen Yan, Biograde is taking a pragmatic approach in marketing its products. The company offers a number of hybrid resins, mixing its product with polyethylene to offer customers a more affordable product.
We start customers with at least 30 or 40 percent renewable material, Chen said. Then, after a while, those customers can be pushed up to higher amounts of renewable material. Some customers, like the Japanese supermarket chain Jusco, use 100 percent biodegradable bags. Most customers, however, are using a hybrid product.
Chen also sees challenges in China's infrastructure. While Biograde may sell fully biodegradable material, composting facilities are needed to bring the bags full-circle. If we use biodegradable products now, they do not match the system, he said.
Certain government measures, however, are helping Biograde compete. A plastic bag ban that took effect last year in China has helped the company become more cost competitive. The regulations set a minimum of 25 microns for all plastic bags, which according to Chen already was the norm for biodegradable bags. At that thickness and with oil prices climbing again bioplastics bags start making more sense.
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