The giant oil and gas conglomerate PTT Plc has decided to delay its polylactic acid (PLA) joint venture for up to two years on concerns over slow demand for green plastics in the global market.
NatureWorks LLC, the US-based company in which PTT Global Chemical Plc (PTTGC) holds a 50% share with Cargill Inc, planned to start construction of Asia's first PLA plant at the end of this year for a total cost of US$200 million.
The facility, the second of its kind in the world after one in Nebraska, was scheduled to operate in 2015 with annual capacity of 140,000 tonnes.
But Nattachat Charuchinda, chief operating officer of the upstream petroleum and gas business group at PTT, said yesterday that the plan has been revised as demand for bioplastics is slowing amid the global economic downturn.
"For the last two years, bioplastics were in the spotlight as everyone was concerned about the environment, but now global economic conditions have turned the industry upside down," said Mr Nattachat.
Nonetheless, PTT is still asking the government to give the company better investment privileges.
Mr Nattachat ruled out the possibility that the delay would affect PTT's group revenue in the years to come, saying bioplastics were projected to generate only 3% of PTT's business in the next five years.
Unlike common plastics derived from petroleum, bioplastics are derived from renewable sources, such as vegetable fats and oils and corn starch, and some are designed to be biodegraded.
PTT is on target to open a $150-million polybutylene succinate (PBS) plant on schedule, said Mr Nattachat.
The project is a joint investment with Japan's Mitsubishi Chemical through PTT MCC Biochem Co.
Groundwork recently started on the PBS plant, which should be operational by the end of next year. Annual capacity will be 20,000 tonnes.
PTT has allocated a budget for research and development of bioplastics applications for consumer uses.
Shares of PTT closed on the Stock Exchange of Thailand at 320 baht yesterday, up four baht, in trade worth 1.22 billion baht.