2 vie for NatureWorks plant

Thailand is among the countries NatureWorks Asia Pacific Co, a joint venture between PTT Global Chemical (PTTGC) and NatureWorks LLC, the world's leading bio-plastics manufacturer, is considering for a new bio-plastics plant worth Bt24 billion to be set up in Southeast Asia this year.

However, as things stand, the company would get the best tax privileges from Malaysia, NatureWorks Asia Pacific general manager Viboon Pungprasert told a news conference yesterday.

"The Malaysian government offers tax incentives by exempting corporate income tax for 10 years and subsidising raw-material prices and energy costs, but Thailand's Board of Investment offers to exempt corporate tax for only eight years," he said.

But Thailand is a production base for raw materials such as sugar cane and tapioca, while NatureWorks Asia Pacific is a 50:50 joint venture between NatureWorks LLC and Thai company PTTGC.

"We need the Thai government to support soft loans or subsidise the cost of raw materials or energy, which would help us make the decision to invest in Thailand," he said.

The first phase of the project will have a budget of Bt12 billion and annual production capacity of 75,000 tonnes. Construction will begin this year and be complete by 2015 or 2016. The second phase, also costing Bt12 billion, will add another 75,000 tonnes to annual capacity.

Half of the investment budget will come from the company's capital, and the rest from bank borrowings.

The company targets return on investment of 15-20 per cent a year.

Demand for bio-plastics is growing strongly, with total sales of about 700,000 tonnes a year, or about 0.1 per cent of the total demand for plastic. NatureWorks estimates that demand for bio-plastics will reach 1.7 million tonnes or about 1 per cent of total plastic demand by 2015.