An Italian company claiming to be the world's leading fully-integrated bioplastics manufacturer is eyeing Thailand as a promising location for an Asia-Pacific manufacturing plant in the future because of the country's plentiful raw materials, including sugar cane and cassava starch.
The company, Novamont, has appointed Thantawan Industry, the country's first manufacturer of flexible drinking straws and reclosable bags, to be its sole distributor of bioplastic pellets in Thailand.
Novamont's new business development director Stefano Facco said yesterday that the appointment was "a first step into the Thai market".
"The market for bioplastic consumption in Thailand remains small. We have to understand the market and create consumption demand in this region before we invest here. Asia Pacific is a growing market for bioplastic. Once the demand grows enough, we will invest for a manufacturing plant," he said.
In Italy, Novamont has established a fully-integrated process of manufacturing bioplastics. Facco said it was the first and only manufacturer in the world that could produce a wide range of bioplastics - from monomer to polyester and compounds - and enjoy a profit every year.
Novamont has one monomer-manufacturing plant, one plant producing polyester, one making compound bioplastics and a research and development centre. All are in Italy. However, the company is considering more manufacturing facilities in other parts of the world.
In the Asia-Pacific region, Thailand is the most promising and interesting location for bioplastics production, he said.
Facco said the next step for Novamont in Thailand might be the setting up of a manufacturing plant that could mix compounds brought from Italy with cassava starch in Thailand to produce bioplastic pellets.
It was possible that in the future, the company could establish a fully-integrated bioplastic-pellet production process in Thailand. Such a manufacturing plant, with a production capacity of 100,000 to 200,000 tonnes per year, could cost as much as €100 million (Bt3.92 billion), he said.
While Novamont presently has no concrete plans for investment in Thailand, local petrochemical companies are planning to invest in the bioplastics industry. Novamont is not worried that it might lose competitiveness to local companies, as it is confident in the state-of-the-art technology it has developed over more than 20 years, Facco said.
He said Novamont was doubling its production capacity every three years. Last year it had a capacity of 80,000 tonnes per annum, and it expects to reach 160,000 tonnes within the next three years.
Thantawan Industry's president Phietoon Trivichitkasem said his company would import up to 300 tonnes of bioplastic pellets per year from Novamont to use in manufacturing plastic products.
He said there were about 4,000 manufacturing plants making plastic products in Thailand. Bioplastic pellets were mostly used to make products for the food and packaging industries.
Phietoon said that if the government introduced policies encouraging the use of bioplastics in Thailand, demand for bioplastic products would soon increase. This could be a key factor in accelerating Novamont's investment in Thailand.
He said more than 90 per cent of Thantawan's production was exported, and its major markets were in Europe, where countries had more concern about eco-friendly products. If Thantawan can expand its markets in Europe, that will mean increased production, along with demand for bioplastic pellets.
Phietoon said Thailand was the world's largest exporter of cassava starch, shipping 26 million tonnes per year. This will ensure that Novamont has abundant raw materials for future production.
Thantawan Industry expects its revenue to grow by 10 to 20 per cent per year following its appointment as Novamont's sole distributor in Thailand.