Toyota Creates Global Bio-PET Supply Chain

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

The Japanese auto giant saidlast week that it will introduce a model next year that will use bio-PETtextiles that cover 80 percent of the interior.

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

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

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

According to Toyota, the world PET demand was 45 million metrictons in 2009. "We expect the growth ratio of PET demand will be around 8percent per annum due to new demand coming from developing countries during thenext 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 forecasts that about 5 percent of the global marketfor 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 222percent 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 worldas of today," says Toyota Tsusho.

The Toyota Tsusho Group will start to produce and sell200,000 tons of bio-PET by the end of this year. Capacity will increase to 1million tons as demand dictates.

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

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

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

Plastics made from renewable resources are expected to growat a compounded annual rate of 41.4 percent over the next five years, accordingto a new reportfrom BCC Research. The dominant feedstock for bioplastics made in the United Statesis corn, although producers are planning a shift to biomass resources in comingyears.