Biodegradable packaging giants extend market reach

By Ahmed ElAmin

- Last updated on GMT

Related tags: Natureworks, Polylactic acid, Bioplastic

Alliances formed between Cargill and a Japan-based company, and
between DuPont and Plantic, indicate that a new strategy is
underway to expand the biodegradable packaging market.

Over the past five years packaging suppliers have been introducing various forms of biodegradable plastics. These materials are made from a variety of plants, in the main corn, in response to projections that consumers and recycling regulations will drive demand for environmentally-friendly packaging. Some companies predict that the market will grow by about 20 per cent a year, and the products are an alternative to petroleum-based packaging such as the widely-used polyethylene terephthalate (PET). In the latest developments Cargill said it had signed an agreement yesterday with Japan-based Teijin Limited to create a joint venture partnership to manufacture and market polylactic acid (PLA). PLA is a plastic biopolymer, wholly derived from corn, which is compostable and biodegradable. Under the agreement Teijin will take a 50 per cent stake in Cargill's NatureWorks, a company set up to manufacture PLA. NatureWorks was set up in the US by Cargill to own and operate what it calls the largest commercial scale PLA plant in the world. Teijin is a global plastics manufacturer. The two company said the development would accelerate NatureWorks' global sales growth and push PLA expansion into the broad plastics and fibers markets. Cargill's vice chairman Guillaume Bastiaens said NatureWorks will benefit from Teijin's expertise in technology and end-use application development "Teijin's downstream application knowledge in fibers, films and plastic compounds will be of immeasurable value as we grow production at our Blair, Nebraska facility and consider additional expansion in the fast-growing global marketplace,"​ said Bastiaens. NatureWorks will greatly benefit from Teijin's expertise in technology and end-use application development. Teaming up with Teijin will allow more brand owners, retailers and converters to address their global interest in Teijin said it intends to leverage its expertise in applications for fibers, films and plastic compounds to play a key role in the development of new markets for NatureWorks biopolymer. Cargill also reported that since 2005, NatureWorks has recorded triple digit volume growth. About 100 brands and retailers in the US, Europe and Asia currently sell fresh foods, beverages durable consumer articles, apparel, home textile, and personal care and hygiene products in flexible and rigid packaging made from PLA. "Today's announcement marks another milestone for the world's first and largest commercial biopolymer manufacturer,"​ said NatureWorks chief executive officer Dennis McGrew. NatureWorks LLC's headquarters and management team will remain in Minnetonka, Minnesota. Teijin had consolidated sales of US$8.5bn in fiscal 2006. Meanwhile Plantic said last week it had formed a marketing and branding agreement with chemical firm DuPont to market its form of biodegradable packaging in the US. Australia-based Plantic manufactures starch-based biopolymers from corn. Plantic and DuPont plan to further develop the Australian company's resins and sheet materials based on high-amylose corn starch, an annually renewable feedstock, for food trays, caps and containers, along with cosmetics and personal care packaging. As well as collaborating on product development, DuPont will market Plantic's products in North America for the first time and sell its products outside Australasia under DuPont's own brand name. Plantic's existing market for the materials had previously been confined to Europe and Australia. DuPont will also brand and sell starch-based injection molding resins made with Plantic technology in all markets except Australia and New Zealand, using the DuPont's Biomax brand. The current plans encompass sheet and injection molding resins with the expectation that more lines will be added to the portfolio as they are co-developed. Plantic's polymer manufacturing technology is based on the use of high-amylose corn starch. The material is derived from the annual harvesting of hybrid corn. Plantic claims the unique chemical and film-forming properties of this type of corn starch allow for development of a range of applications across conventional plastics markets. The plastic is biodegradable and compostable. Last year BASF forecasted that the world market for biodegradable plastics would grow by about 20 per cent per year. Companies like US-based Naturally Iowa have been using PLA for packaging products like organic milk. Retailers like Delhaize in Belgium and Auchan in France have also been testing PLA for various food packaging.

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