SCOTTSDALE, ARIZ. (Aug. 1, 1:55 p.m. ET) — Casey Container Corp. recently signed an agreement for $4 million in equity funding, and the Scottsdale, Ariz.-based startup is scouting manufacturing locations in Florida to blow mold biodegradable PET preforms.
The agreement signed July 1 between Casey and Crown Hospitality Group LLC of Schaumberg, Ill., an affiliate of CEG Fund Ltd., provides the $4 million in equity funding to Casey in four tranches over a one-year period.
In exchange, Crown gets 61 million shares of Casey common stock and two of the five seats on its board. Crown also received first right of refusal over future Casey funding opportunities during the term of the deal.
In a July 25 telephone interview, Casey President and CEO Martin Nason said the company will set up manufacturing in the Tampa-St. Petersburg, Fla., area in order to have good shipping access to the rest of Florida, as well as the Caribbean and Latin American.
“We have located a few sites in Tampa that are very very good. We estimate that our facility will have the capacity to do approximately 700 million biodegradable preforms per year,” he said.
Casey's preforms will use the EcoPure additive made by Albuquerque, N.M.-based Bio-Tec Environmental LLC to enhance biodegradability of bottles molded from its preforms. EcoPure only begins biodegrading once it is in a landfill environment, and takes approximately 2-10 years to break down.
Some of in the plastics industry have criticized Casey's biodegradability claims on the grounds that EcoPure only works in so-called “bioreactor” landfills, in which liquid and gas conditions are constantly managed to accelerate waste decomposition. But James T. “Tom” Casey, the company's vice president of technology and sales director, defended the additive in a July 25 telephone call.
“The bioreactor is probably the best place, under ideal conditions that are constantly maintained, in terms of ecology and economics and everything else if all of our plastics were put into a bioreactor — but we know that's not going to happen.
“The [EcoPure] material will biodegrade in open landfills, in a closed landfill, [but] we do not have the extensive testing to take [it] to the end of life in a compost facility. That has not been resolved yet,” he acknowledged.
“The concept with EcoPure is that if the bottle [containing it] is in contact with dirt, it's going to biodegrade. I've seen people make the statement that they could throw bottles out in their parking lot and they will biodegrade — that's not true. But if you can put a bottle in a yard with ripe dirt in it, it would biodegrade,” Tom Casey added.
Nason said that Casey Container should begin shipping preforms by later September or early October.
“We're telling people when we believe that we're going to be actually producing. But we will not give a date as to when we can deliver to them until we know that we have everything in place and will be able to deliver. I'm a big believer in the philosophy of, ‘Underpromise, overdeliver,'” Nason said.
Casey was formed in January 2010 from Sawadee Ventures Inc., a failed mining venture started in 2006 to pan for gold, silver and copper in Canada. Sawadee in 2008 became a shell company, in search of new business partners and opportunities.
While remaining a shell company, Casey has attempted to start small-scale manufacturing, signing a memorandum of understanding in March 2010 to acquire Mountain Green of Arizona LLC, a Tempe, Ariz.-based manufacturer of plant-based detergent, household cleaning and baby products. That agreement terminated Dec. 8, according to Securities and Exchange Commission filings.
Terry Neild, Casey's chairman and secretary, also is chairman of Taste of Aruba Inc., which plans to eventually blow mold PET water bottles on the Dutch island of Aruba, once it secures its own equity funding. Casey has an agreement to supply preforms to Taste of Aruba through 2015.
Meanwhile, the search is on for the perfect Florida site for that first preform plant.
“Our intention is to have four or five facilities in the U.S.,” Nason said. “Where we have them is dependent on a great extent on where our target markets are, as well as where the blow molders are. It depends on the volumes.”
He added that Casey is in negotiations with at least three beverage brand owners to set up preform production at their plants.
“It's critical for us is to control the preform, because we want to make sure of the quality and to make sure that the right amount of the additive is added to the virgin plastic in order to enhance the biodegradable nature of the product,” he said.
Casey should employ 30 in Florida by the end of 2011, and once it reaches full capacity, will have 100 workers there, Nason said.
