MINNETONKA, MINN. (Oct. 12, 2:20 p.m. ET) — Asian petrochemicals maker PTT Chemical Public Co. Ltd. has paid $150 million for a 50 percent stake in bioplastics leader NatureWorks LLC.
Rayong, Thailand-based PTT now joins American agricultural giant Cargill as equal partners in NatureWorks, which is based in Minnetonka, Minn., and operates a 300 million pound-per-year capacity bioplastics plant — the world's largest — in Blair, Neb.
NatureWorks officials confirmed the deal Oct. 12, also confirming that the firm's second global plant would be located in Thailand. In a phone interview, NatureWorks global marketing director Steve Davies said the new plant would be the same size as the Blair facility and likely would be collocated with existing PTT operations in Rayong.
“It would make sense for the second plant to be there,” Davies said of the decision. “It's a big industrial site. PTT already has the infrastructure and work force there.”
PTT already is developing a bioplastics plant in Rayong in conjunction with Mitsubishi Chemical Corp. of Tokyo. That $233 million plant, announced earlier this year, is expected to make bio-based polybutylene succinate.
The proposed NatureWorks plant in Thailand would use sugar cane and cassava — a rootlike vegetable common in tropical regions — as feedstocks for its Ingeo-brand polylactic acid. In Blair, the company uses corn.
“We'll use the feedstocks that are available in that part of the world,” Davies said.
Davies said PTT “has a very solid vision of what they want to do” in bioplastics. “They want to be the green chemical hub of Thailand, and they've already leapfrogged the other guys out there,” he said. “They're already a big polyolefin producer in the region.”
In a news release, PTT President and CEO Veerasak Kositpaisal said that his firm's invest in NatureWorks and its Ingeo technology “is in line with our long-term strategic green growth and diversification objectives.”
“Ingeo offers the performance of conventional plastics and fibers with a fraction of the greenhouse gas emissions and lower non-renewable energy requirements,” he said.
NatureWorks President and CEO Marc Verbruggen added in the release that the addition of PTT “is a significant investment by a leading chemical company, which will allow NatureWorks to continue its aggressive growth while expanding its capacity to meet global demand for bio-based products.”
Verbruggen and other bioplastics market watchers have said that annual volume growth for NatureWorks and other bioplastics makers is expected to average 25-30 percent for the next several years. NatureWorks does not release sales data, but its annual sales are estimated to be between $120 million and $150 million, according to industry sources.
For NatureWorks, the deal with PTT marks the third different partner that Cargill has had in the venture since launching the business with Dow Chemical Co. in 1997.
Dow exited in 2005, with Japanese conglomerate Teijin Ltd. coming on board in 2007. Teijin then exited NatureWorks in 2009.
Davies said NatureWorks' previous partners bowed out because of issues within their own companies, and not because of any issue with bioplastics.
“If you look at it, Dow was exiting a lot of joint ventures at the time, and Teijin was going through some difficult financial situations,” he said.
Midland, Mich.-based Dow earlier this year said that it would re-enter the bioplastics field by building a major sugar cane-based bioplastic plant in Brazil through a joint venture with Mitsui & Co. Ltd. of Tokyo.