Bioplastics firm juggling Thailand, China, and Malaysia for site of first Asian plant

During a recent visit to Bangkok, NatureWorks president and chief executive Marc Verbruggen said the expansion would serve rising demand in the bio-plastics industry and its expanding customer base in Asia. He said demand for bio-plastics consumed less than 1 per cent of the world's plastic production, but was expected to rise to 8 per cent by 2019 following increased environmental awareness.

Verbruggen said selection of the location would be finalised in the third quarter of next year and the new plant should begin operating in 2013.

The plant will require more than US$100 million (Bt3.5 billion), and its size will be similar to the existing one in the US.

NatureWork's US plant has an annual production capacity of 140,000 tonnes, which accounts for 90 per cent of the global supply.

"It is too early for us to tell where to establish the new plant, because the decision will depend on how soon the global economy can recover, but Thailand is very interesting since it is one of the few countries in the world that grow plenty of sugar cane and tapioca, which will help us secure the feedstock," he said.

He accepted that the country's political turmoil would clearly play a part in its decision. "But we observe the situation not only in Thailand but also other countries like China," he said.

Based on general estimates, the cost of making bio-plastics will be competitive when crude oil prices reach $80 per barrel or higher, he added.

Somsak Borrisutthanakul, president of the Thai Bioplastics Industry Association, said Thailand had the best potential for such a plant thanks to plentiful feedstock, a strong plastics industry and a good logistic system. He also urged the government to regulate the plastics industry more strictly and to encourage people to use bio-plastic products instead of traditional plastic.

He said China's strength was its large market and the government's regulations covering bio-plastics, while Malaysia's government usually provided "full incentives", financial and otherwise, to attract foreign investment.

He also noted that the Thai Industrial Standards Institute was to launch new standards for bio-plastics late this year.

Supachai Lorlowhakarn, director of the National Innovation Agency, said Verbruggen had already talked to the Board of Investment and some local giant firms such as Siam Cement Group about investing here.