Biodegradable plastic sales are expected to help loss-ridden Applied DB, a local polyvinyl chloride (PVC) and adhesive maker, improve its business performance as the MAI-listed company starts selling the products this year.
The company plans to sell plastic bags used to carry goods at shopping malls and plastic bags used in plant nurseries.
Roughly 10-20% of the raw materials used to make the plastic bags comes from cassava, but corn flour can also be used.
"We have our own formula for making biodegradable plastics, developed by our research and development team," said Jirawat Akkranupornpong, chief financial officer of the company.
Applied DB decided to diversify into bio-based products following the government's plan to promote bio-, circular and green economic principles.
The bio-economy, which is driven by the use of renewable resources as raw materials to produce energy, food and other value-added products, will be a new source of revenue for manufacturers.
Mr Jirawat said the sales of biodegradable plastic bags, managed by Applied DB's fully-owned subsidiary ADB Bio, are not expected to generate substantial revenue in the first year because the company is in the initial phase of product commercialisation.
The company not only wants to benefit from bio-based product sales, but also pave the way for its carbon neutrality campaign in the long term in order to strike a balance between carbon dioxide emissions and absorption.
Applied DB operates a PVC, sealant and adhesive business that includes products used as feedstock for shoe and wire cable production.
In the first quarter of this year, the company posted total revenue of 387 million baht, a 14% year-on-year decrease from 454 million baht.
The decline was linked to reduced sales of adhesives and sealants, amid intensifying competition and a slowdown in demand within both domestic and international markets.
Profitability was affected by the price fluctuation of chemicals which Applied DB used as raw materials. These prices tend to increase as energy costs rise.
In 2023, Applied DB reported a loss of 46.7 million baht, expanding from a loss of 6.9 million in 2022.
