13 September 2010

NatureWorks may partner with PTT – $400m bioplastic plant considered

The plan could make Thailand the location of the first polylactic acid (PLA) plant in Asia

(Editor’s Note: According to information from NatureWorks in Octobre 2010, no decision has been made in favor of Thailand so far. Concerning statements are solely based upon speculations by journalists!)

NatureWorks LLC, the world’s number one bioplastic company, has been in talks with potential partners including PTT Plc to jointly invest in a large-scale bioplastic plant in Thailand worth about $400 million.

The plan could make Thailand the location of the first polylactic acid (PLA) plant in Asia in 2014 and the second globally, says Marc Verbruggen, president and chief executive of the Minnesota-based company.

NatureWorks’ PLA plant in Nebraska opened in 2003 as the first of its kind in the world. It doubled its capacity to 150,000 tonnes annually in the middle of last year.

“We are going to make a final decision by the end of this year. It will take two and a half to three years for the construction, so the plant should be operated in late 2013 or early 2014,” said Mr Verbruggen.

NatureWorks is currently in the process of selecting the location of the 150,000-tonne facility. Brazil is among the candidates while other potential locations are Thailand, Malaysia and Singapore, he said.

Three basic factors in the final decision are local availability of raw materials including tapioca and sugarcane, markets of the product, and incentive programmes.

“We are not looking at Thailand as the potential location based on the local market only but also the advantages for our product to be easily shipped to North Asian countries such as China, Japan, Korea and Taiwan,” Mr Verbruggen said.

Thailand, meanwhile, also has an incentive programme in place for bioplastic investment but the question is “is it good enough”, noted Mr Verbruggen. The company is also looking for potential local partners who have expertise in petroleum-based polymers, he added. Siriwan Chierapong, executive vice-president for business development and project management of PTT’s petrochemical and refining operation, confirmed that the Thai energy giant had discussed a PLA venture with potential investment partners, namely NatureWorks.

A fully integrated PLA complex could costs in a range of $500 to 600 million. The plant is aimed to be operational in 2014, she said. Netherlands-based Purac, which produces lactic acid (LA) in Thailand, is also among potential partners, she added. “We have called on the government to give the bioplastic industry a boost by providing the incentives to make Thailand more attractive and establish the integrated production in the country,” Ms Siriwan said.

Malaysia and Brazil have incentive programmes because their governments want to draw investments from bioplastic technology owners. McKinsey & Co said Thailand could become a global leader in bioplastics and bio-based chemicals given the country’s cost and geographical advantages.

Thailand has abundant and potentially low-cost sugar and starch-based feedstock and a well-developed chemical industry, said Marco Ziegler, a principal of McKinsey & Co Inc (Japan). “Compared to other potential ‘bio hubs,’ Thailand also has privileged geographical access to the Chinese chemical market,” he added.

Source: Bangkok Post, 2010-09-13.

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