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BIOPLASTICS DORIS DE GUZMAN NEW YORK

Bioplastics industry grows in China

Chinas bioplastics production increases to meet growing export demand as well as future domestic consumption
Chinas bioplastics manufacturing industry continues to grow. While most production today is targeted for export, domestic demand is rising rapidly. Overall bioplastics capacity in China today is around 7,000 tonnes/year with more capacity expected this year if several announced plant start-ups actually come online, said Jim Lunt, managing director of US consulting rm Jim Lunt & Associates. Current bioplastics demand in China is still quite small due to higher price but is beginning to grow in some niche applications such as cosmetics in Hong Kong, said Lunt. Also, the concern by the Chinese government on the use of oil for plastics, driven by overall increasing oil demand, is creating domestic interest in bioplastics particularly the starch blends which tend to be cheaper than products such as polyhydroxyalkanoates (PHAs) and polylactic acid (PLA). Most of the current bioplastics produced in China are mainly for export instead of domestic sale because of its high price, according to China-based consultancy CCM International. Still, bioplastics production in China is expected to grow steadily with the increasing demand from abroad. We consider the growth rate of bioplastics demand in China to be over 20% in the next ve years, it said.
PRODUCTION CAPACITY OF BIOPOLYMERS IN 2015
North America 32.9% South America 20.5%

China has a fast-developing market for bioplastics, particularly the starch blends The consultancy, in its China Polylactic Acid report, published in May, estimated China PLA production capacity at 19,300 tonnes/year with manufacturers that include Zhejiang Hisun Biomaterials (5,000 tonnes/year), Shenzhen BrightChina Industrial (10,000 tonnes/year), Shanghai Tong-jie-liang Biomaterials (1,000 tonnes/year), Nantong Jiuding Biological Engineering (3,000 tonnes/year) and Wuhan Gude (300 tonnes/year). PLA is a bioplastics made from renewable resources such as corn and cassava, and can compete with most conventional thermoplastics in terms of properties such as strength, elastic recovery, heat, and sealability, in certain applications. Plastics end-users had been slow to adopt PLA because of the price premium over conventional polymers such as polypropylene (PP) and polystyrene (PS) but a shrinking price gap between PLA and conventional polymers gives plastics end-users more incentives to use PLA as an alternative, according to Steve Davies, marketing director for US-based NatureWorks, the worlds largest PLA producer owned by US agribusiness rm Cargill, who spoke on the sidelines of the four-day ChinaPlas exhibition in Guangzhou, China, held in May. In China, most PLA manufacturers have adopted the production technology of ring-opening polymerization of lactide, which is similar to PLA production in Europe and the US, reported CCM. Only one manufacturer, Shanghai Tong-jie-liang, uses the PLA production technology of direct polycondensation of lactic acid, which is less adopted abroad. Right now, Chinas PLA production cost is higher comCCM. Major domestic PLA manufacturers are already expanding their capacities in order to grab more market share in the future. Two producers are expected to launch new production lines by year-end, CCM said. Chinas PLA industry is still at an early stage of development, but it has great potential in the future, aided by government support and increasing public environmental awareness. The pollution generated by plastics production is becoming more serious. If PLAs price can be reduced, its growth rate will become much higher, CCM added.

Chinas PLA production cost is higher compared to those in the US, such as NatureWorks
CCM INTERNATIONAL

in total: 1.71m tonnes

Asia 28.1%

Europe 18.3%

Australia 0.2%

SOURCE: European Bioplastics

pared to those in the US such as NatureWorks, CCM said. Like PHA, most PLA and its end products are also exported because of their higher price. Imported PLA into China is also expensive because of the very high import duty at 45% compared to other Asian nations that are typically 6.5%, CCM said. Still, demand for PLA in China is expected to grow to over 2m tonnes in 2015, according to

DELIVERED IN BULK NatureWorks PLA marketed under the Ingeo brand is priced at $0.901.00/lb (0.620.68/lb) delivered in bulk in the US, close to the US prices of conventional polymers such as PP and PS, said Davies. The company produces PLA at its 140,000 tonnes/year plant in Blair, Nebraska, US, and plans to build its second plant either in Thailand, Malaysia or Singapore because of growing demand for PLA in Asia. NatureWorks plans to specify the location later this year, the company said. The new plant could come on line in 2015. NatureWorks announced in
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22 | ICIS Chemical Business | June 13-19, 2011

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March that it has started selling Ingeo packaging resin grades directly to customers after ending its exclusive distribution agreement with a Taiwanese company. Taiwan has long been one of the pioneers in the production of PLA-based packaging materials. NatureWorks has experienced signicant business growth in Taiwan and decided to continue that growth by forging closer technical and commercial relations with large-scale packaging customers there, said NatureWorks CEO Marc Verbruggen.

MULTIPLE SALES CHANNELS But NatureWorks still continues to supply Ingeo packaging resin through its existing Taiwanese distributor to provide multiple sales channel options for local customers, said Verbruggen. Taiwan-based companies are among the largest customers of Ingeobased products worldwide, and Asia is NatureWorks fastes growing sales region, he said.

Taiwan currently exports about 65% of its nished products made from PLA, said Clover Chang, Taiwan-based director for the US Grains Council, a private, non-prot corporation founded by US agribusinesses and various grain producer organizations. Wei Mon Industry of Taiwan is the countrys largest producer of PLA products, noted Chang. Wei Mon imports about 10,000 short tons/year of PLA resins from the US to support its growing production, said Chang. The company is looking at the Chinese market in particular with plans to extend its business to the Mainland. As of this year, it has already ordered several containers of PLA resins to be directly imported from Blair to China. To spur rapid introduction of PLA into the Chinese market, Chang noted that Chinas government must develop a policy mandating a certain percentage of bioplastics in the production of

single-use disposable food containers in China similar to Taiwans policy which mandates a 35% usage rate.

PHA PRODUCTION ADVANCES For PHA, there are three major producers in China, namely Tianjin Green Bioscience, Shenzhen Ecomann Biotechnology, and Ningbo Tianan Biological Material, with total capacity of 17,000 tonnes/year, reported CCM. Ningbo Tianan Biological Material has 2,000 tonnes/year of capacity and mostly sells its products to Europe and the US, said Lunt. It wants to expand its capacity to 10,000 tonnes/year, he said. Shenzhen Ecomanns secondphase PHA project, which will raise its capacity from 5,000 tonnes/year to 50,000 tonnes/year is still under environmental impact assessment and land evaluation, noted Lunt. The construction was estimated to start in April or May this year. As of yet, none of their product appears to

be in the marketplace, he said. Tianjin Green Bioscience, in which Dutch chemical rm DSM has invested, is completing a 10,000 tonne/year facility for PHA but is not yet producing, said Lunt. He estimates growth rates for domestic bioplastics consumption in China to be around 40 percent per year for the next few years as the standard of living continues to increase in the region. The overall growth rate in China will probably be higher than in other geographies since they are starting from a much lower demand base, said Lunt. The challenge is that the bioplastics price in China will remain higher than conventional plastics for some time, which will limit domestic use. On the other hand, China will be able to supply Asia mainly Korea, Taiwan and maybe Japan where their delivered costs could be lower than from the US, he added. Additional reporting by Bee Lin Chow in Singapore

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