Partner sought for venture

Netherlands-based CSM, a leading maker of chemicals for food, is seeking a new partner to complete its 250-million integrated bioplastics production facility in Thailand, says CSM chief executive Gerard Hoetmer.

"So far we have invested 80% of the project investment budget, and only part of the production chain remains for us to inject the remaining 20%," said Mr Hoetmer.

He said CSM wanted a strategic partner, either Thai or foreign, to help it set up a full-scale bioplastics complex to serve strong growth in world demand. Details are expected to be concluded this year.

The investment in Thailand has been made through its local unit, Purac (Thailand), which has been producing lactic acid and lactide since 2007, with annual capacity of 100,000 tonnes, in Rayong.

Lactic acid is a main material for producing polylactic acid (PLA), which is crucial for making bioplastics.

"We have a long-term plan to create a full-scale bioplastics complex. We also are looking at Thailand, but the final decision on investment, with regard to location, production size and timing has not yet been taken. The decision will be depend on the support we get from the government and plastics industry in each country," Mr Hoetmer said.

Thailand has producers that make nearly all of the materials needed for biolplastics, except for PLA.

"We need locally made PLA as it would save costs and that would make our bioplastics industry able to compete with other producers across the globe," Mr Hoetmer said.

As one of the world's largest sugar exporters, Thailand has strength in upstream raw materials for lactic acid. It also has advanced technology for processing PLA into bioplastic pellets to serve other industries.

"Thailand can play a significant role in this industry. We would like to continue our investment in Thailand but we need support from the government and the industry. If co-operation is received, we [hope to see] PLA in the market two years from now," Mr Hoetmer said in Bangkok last week.

The company's investment plan is in line with Thailand's National roadmap for the development of an integrated bioplastics industry by 2012.

Purac and US-based NatureWorks are the only international bioplastics companies operating in Thailand.

Bioplastics, which are made from plant material, not only provide an opportunity to increase value from agricultural resources, but are more environmentally friendly than plastics made from fossil fuels.

Apart from packaging, bioplastics are also used in engineering and textiles.

CSM has developed a second generation of PLA with heat resistance of up to 80 degrees Celsius.

It is suitable for high temperature-resistant packaging and disposables, as well as for engineering plastics and applications in automotive, electronic and fibre production.

As a result, Mr Hoetmer said, the market potential for PLA is even bigger and could create more value for Thai products.

Although bioplastics are now more expensive than conventional plastics, he said that third- and fourth-generation PLA would allow bioplastics to be more competitive within five years.

CSM, which employs 8,700 people in 24 countries, reported 2008 after-tax profits of 90 million on sales of 2.8 billion. CSM is listed on Euronext Amsterdam.