Bio-Based Polymer News
Why NatureWorks’ 2nd plant is not in China
6 years, 1 month ago Posted in: Bio-Based Polymer News 0

Concerns over available feedstocks drives Natureworks decision in facility location

By Nina Ying Sun, Plastics News China

NatureWorks Chief Marketing Officer Peter Clydesdale spoke at a Chinaplas concurrent event last month, with news and comments on global growth strategies and plans, including in the U.S., South America, and Asia. I also interviewed him on why the company didn’t pick China as the location for its second plant.

Asia plant

NatureWorks will announce details of its second global plant — to be located in Thailand, or Malaysia, or Singapore — “in one or two months,” Clydesdale said on May 18.

There are many elements in the site selection process, he noted. “It’s not a black and white, simple decision.”

The primary concern with China is access to feedstocks. For the ethanol industry in China, for instance, “there have been changing decisions on how much corn will be available for industrial uses vs. food use.”

Also, a lot of the potential feedstock in China would originate in Northeast China, but most plastics processing is concentrated in the South. The long distance and inefficient domestic transportation would be expensive.Other factors for consideration include the large amount of investment required to build such a facility, access to cellulosic feedstock in the longer term, locations of the OEMs, etc.

In comparison, places like Thailand, Malaysia and Singapore will be able to supply sugar cane and tapioca-based feedstock, which will likely to be the primary feedstock for NatureWorks’ PLA resin plant. Those countries also have large petrochemical industries and many downstream converters. Meanwhile, the local governments are offering incentives and strategic projects to encourage the growth of bioplastics.

The Asia plant is expected to come on line in late 2014 or early 2015.

Americas

In the U.S., the company is finalizing a 20,000 ton expansion of its 140,000-ton manufacturing facility in Blair, Neb. The additional capacity will come on stream in the next 12-18 months.

NatureWorks also is looking into recycled PLA as a reasonable sourcing option starting 2013. Later, maybe starting in 2017 for its third plant and beyond, the company hopes to have “a component of cellulosic feedstock.”

The company now has agents in Brazil, Chile, Mexico and Colombia, and is looking to expand into Argentina. The Central and South America business is expected to represent 5 percent of its total sales in the next three years or so.

Global

With more than 300 licensees worldwide, Natureworks said more than 30 percent of the Ingeo biopolymer sales are from the Asia Pacific (including Japan), about 20 percent in the European Union, and close to 50 percent in North America.

Global annual sales growth rate has been “pretty much” in the 30-40 percent range since 2005, despite the global recession, the company said.

While noticing emerging competition from other bioplastics makers such as China’s Hisun, Clydesdale said they can’t compete with NatureWorks’ scale. “I don’t see the gap changing in five years.”

 

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