FTI to urge govt to back soft loans to support bioplastics

Economy August 20, 2014 01:00

By Pichaya Changsorn
The Nation

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The Federation of Thai Industries will meet with the Finance Ministry and other authorities today to consider a soft-loan programme to help jump-start a Bt100-billion bioplastics industry in Thailand, said a petrochemical-industry executive.

Viboon Pungprasert, general manager of NatureWorks Asia Pacific, a joint venture between PTT Global Chemical (PTTGC) and US-based Cargill, said the FTI would ask the ministry to provide a Bt2.5-billion budget to subsidise low-interest loans to support the creation of a bioplastics industry.
The soft-loan package could spur some Bt100 billion worth of investments in the bioplastics industry here within the next five to 10 years, comprising Bt75 billion for upstream projects, and the rest for downstream production, he said.
If the soft-loan measure is agreed, Viboon said NatureWorks would ask the US parent firm’s board of directors to go ahead with a plan to manufacture polylactic acid (PLA), a major type of biodegradable polymer, in Rayong, for completion in the next three years. The upstream bioplastics project will require an investment of Bt8 billion in the first phase, which will have production capacity of 75,000 tonnes per annum, and more than Bt10 billion for the full capacity of 150,000 tonnes per annum.
Thailand is well positioned to become a bioplastics production hub, thanks to its strong agricultural-based economy and the existence of some 3,000 plastic converters (downstream producers). Bioplastics are made from renewable biomass sources such as agriculture by-products and recycled plastic bottles, Viboon said. 
He said NatureWorks’ PLA plant in the US used cornstarch as its main raw material, while the planned Thai factory would use 200,000 tonnes per year of sugar cane as its feedstock. Nevertheless, to cut its manufacturing costs, the company will follow the local ethanol industry to request the use of sugar-cane juice as its raw material instead of cane.
Officials from the National Economic and Social Development Board, Industry Ministry and Energy Ministry will also take part in today’s meeting. The soft-loan proposal was submitted to the Finance Ministry last year but was delayed by the dissolution of the House of Representatives.
Viboon said other immediate beneficiaries of the proposed soft-loan programme would include PTT MCC Biochem, a joint venture between PTT and Mitsubishi Chemical Corporation, which is building a facility to produce polybutylene succinate (PBS), a biodegradable plastic, in Rayong, for completion next year. BASF, which imports its ecoflex biodegradable film from abroad, could also benefit from the scheme.
Although bioplastic currently commands just 1 per cent of the world’s plastic markets, it is growing by 20 per cent per year, he said.
In the domestic market, Viboon said NatureWorks targeted selling 500 tonnes of PLA this year, up from just 20 tonnes when it began its marketing drive last year. 
He was speaking at a press conference yesterday to announce its first major deal with a local firm, Dairy Home, which agreed to turn all of its yoghurt packaging into organic packages made from NatureWorks’ PLA resin.
Dairy Home managing director Pruitti Kerdchoochuen said the firm decided on the packaging shift because it wanted to become fully organic – it has already been selling organic milk and yoghurt products. The packaging cost will go up by about 30 per cent, but will still be small compared with the products’ total costs, he said.