Toyota Creates Global Bio-PET Supply Chain

By: 
October 25, 2010

Toyota is establishing the first global supply chain of
biologically derived polyethylene terephthalate (PET) in preparation for a projected
explosion in demand over the next five years.

The Japanese auto giant said
last week that it will introduce a model next year that will use bio-PET
textiles that cover 80 percent of the interior.

The new announcement describes the company's plan to source
and produce the material for car interiors and to sell the remainder for use in
beverage containers and apparel.

Toyota Tsusho, the trading arm of Toyota, is establishing a
joint venture with China Man-Made Fiber Corp. of Taipei City, Taiwan, that will
produce mono ethylene glycol (MEG) from ethanol made by Braskem with Brazilian sugar
cane. MEG is an intermediate chemical used to produce PET. The name of the JV
is Greencol Taiwan Corp.

To complete the supply chain, Toyota Tsusho will sell MEG to
PET producers on a toll basis, and then sell the bio-PET globally.

According to Toyota, the world PET demand was 45 million metric
tons in 2009. "We expect the growth ratio of PET demand will be around 8
percent per annum due to new demand coming from developing countries during the
next five years, so world PET demand will be 60 million tons per year as of 2015,"
Toyota Tsushi said in a statement released to the press.

Toyota Creates Global Bio-PET Supply Chain_small_A

Click here for larger image.

Toyota forecasts that about 5 percent of the global market
for PET (2.25 to 3 million tons per year) will come from renewable resources,
such as sugar cane. That's a compounded annual growth rate of more than 222
percent per year.

"In such a situation, we will have a shortage of bio-PET,
because there are only 200,000 tons (our estimate) of availability in the world
as of today," says Toyota Tsusho.

The Toyota Tsusho Group will start to produce and sell
200,000 tons of bio-PET by the end of this year. Capacity will increase to 1
million tons as demand dictates.

PET derived from renewable resources has identical
properties to PET derived from petroleum, and can be recycled the same way. Coca-Cola
is also making significant use of bio-PET in beverage containers.

Braskem and Dow Chemical are also producing bio-ethanol that
will be made into polyethylene. Procter & Gamble has announced
plans to use bio-polyethylene in cosmetic cases.

Greencol Taiwan Corp. is located in Kaohsiung, Taiwan and
has an initial capitalization of $123 million.

Plastics made from renewable resources are expected to grow
at a compounded annual rate of 41.4 percent over the next five years, according
to a new report
from BCC Research. The dominant feedstock for bioplastics made in the United States
is corn, although producers are planning a shift to biomass resources in coming
years.

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