Leaf Resources enters biodegradable packaging market leveraging Glycell strategy

Bildschirmfoto 2017-10-26 um 13.16.29 — Ken Richards, CEO of Leaf Resources

Australia-based Leaf Resources has secured a license for an innovative biodegradable coating product for the packaging market. The product is based on lignin and also utilizes glycerol, two of the products that Leaf’s Glycell process will produce. According to the company, “Leaf’s Glycell process break down plant biomass at lower temperature and pressure and generate a higher yield of cellulose than conventional approaches”.

“This is a wonderful opportunity – Ken Richards, managing director of the Australian company, said – for Leaf Resources to grow and to continue working with QUT. We are fortunate to secure an innovative technology that delivers a much-needed product to the market, complements our core strategy so well and can deliver shorter-term cash flows to Leaf Resources.”

The new coating technology is licensed from QUT bluebox, the commercial arm of the Queensland University of Technology (QUT). In packaging markets, there is a strong and growing consumer preference towards biodegradable materials because of environmental concerns. The new biodegradable coating technology fulfils three requirements; renewably sourced, readily recyclable and biodegradable.

Interestingly, the process for converting biomass to functional industrial sugars enable technologies to produce renewable chemicals that will substitute petrochemicals used in manufacturing today.

Initially Leaf’s strategy will be to buy lignin and glycerol and sell the coating product to paper companies to coat paper and cardboard for the various market segments and supply the coating via toll manufacturing. Considerable work has been done on the availability of toll manufacturers in the USA in particular and they are readily available at competitive pricing.

This strategy for both manufacturing and marketing will keep capital requirements and operating costs to a minimum. Contracted sales of product to licensees could provide short-term cash flow to Leaf Resources.

In the medium term, development of the new product provides additional revenue for a commercial Glycell plant, providing valuable off take demand for lignin, which in previous modeling was simply burnt for power generation. Hence the development of this product improves the economics of a commercial Glycell plant.

Leaf has signed an exclusive license contract with QUT bluebox for Malaysia, U.S., Canada and Brazil. The global biodegradable packaging market was worth $4.7 billion in 2015, growing at a rate of 17.2% and is expected to reach $14.3 billion by 2022.