Plantic inks deal to improve biodegradable plastic supply chain

Plantic Technologies, the Australia-based developer of biodegradable plastics made from plants, has announced plans for a new US manufacturing facility designed to reduce the cost of its production procesess.

The company has signed a deal to relocate one of its manufacturing lines to the premises of Indianapolis-based National Starch in a bid to reduce supply chain and material costs and facilitate closer collaboration between the two companies' research and development and manufacturing efforts.

National Starch is Plantic's primary supplier of specially modified starches, which are used in the production of the firm's corn starch-based bio-plastics. The two firms have been working together since October 2007, when they signed a joint collaboration deal to develop new starch and starch modification technology, which acts as the basis for creating biodegradable polymers.

Plantic's chief executive, Brendan Morris, said that the new manufacturing facility was expected to "significantly reduce the current cost of Plantic materials by integrating the two processes of manufacturing and key raw material supply".

The reduced costs could ultimately be passed on to the firm's 40 customers in Australia, Europe and the US, which are using its rigid sheet, injection moulding, blow moulding and flexible packaging resin in a range of projects and trials.

Morris admitted that the company's commercial operations had been affected by the "slower than anticipated recovery" from global recession, and that as a result fiscal 2009 revenues would be lower than expected.

But he added that losses from operations and cash in the bank would be in line with forecasts due to cost reduction programmes initiated earlier in the year and careful cash management.

Morris also predicted that the outlook for 2010 is "optimistic", arguing that the relocation of Plantic's manufacturing line would have a "beneficial impact" on sales.

In addition to the extended partnership with National Starch, Plantic said that the two companies are discussing expansion plans in the US market, and expect to make further announcements in the new year.

Earlier this year, Plantic released research from the Royal Melbourne Institute of Technology suggesting that its plant-based plastics delivered significant cuts in energy use and carbon emissions compared to conventional plastics.

The research calculated that one sheet of Plantic material containing enough plastic to make 1,000 chocolate trays uses 544MJ of energy, compared to the 1,362MJ used to produce 1,000 trays made from conventional polyethylene.