Bioplastics Maker Plantic Copes With Tough Market Conditions

The focus for bioplastics companies in the past 18 months has been more on capital (and survival) than on technology. Profits have been hammered by the reduction in oil-based plastics prices since July, 2008. Prices for a typical polyethylene sheet resin peaked at close to $1.10/lb in July, 2008, dropped to $0.60/lb in early 2009, and has climbed back to above $0.90/lb recently. Sales at a major Australian thermoplastic starch producer, Plantic, dropped from $3.2 million in 2008 to $1.1 million in 2009.

The good and bad news about bioplastics is that their prices are somewhat inelastic in comparison to plastics whose prices are tied to oil. When oil prices are high (above $85/bbl) bioplastics are cost competitive. When oil prices drop, bioplastics aren’t in the game.

Plantic developed a strategic plan to boost its fortunes.  In one step, Klöckner Pentaplast, a leading global manufacturer and marketer of rigid sheet, will sell thermoplastic starch sheet from Plantic, replacing DuPont. The sheet will be supplied from a manufacturing plant that Plantic is establishing in the USA in collaboration with National Starch and Chemical. Klöckner Pentaplast has the right to manufacture the material under license in the future.

Plantic is also developing a new line called ecoPlastic, which partners thermoplastic starch with other plastics.