NatureWorks to make decision by end of year
NatureWorks, the world's leading manufacturer of polylactic acid (PLA), will decide by the end of the year where it will set up its second plant, with an investment of US$300 million (Bt9.2 billion) to $400. Thailand is among potential sites for the new plant.
President and CEO Marc Verbruggen said last week in Bangkok that the company was evaluating which country was the most appropriate for its investment. Its choices are some countries in South America, Europe and the Asia-Pacific. Thailand, Malaysia and Singapore are among the contenders as well.
Although Singapore does not have a sugarcane or cassava plantation, the good logistics and transportation can encourage the country to be a manufacturing base for the PLA.
Other possible countries are France, Germany, the Netherlands and Brazil.
The company foresees the demand for bioplastic product to increase. NatureWorks' revenue in 2009 rose more than 40 per cent from the previous year, and it expects to experience similar growth this year.
NatureWorks has operated its first PLA plant located in Nebraska, the US, in 2003 with production capacity of 150,000 tonnes per year.
He said the investment size for its second plant should be between $300 million and $400 million, and the production capacity will be similar to the first manufacturing facility.
"Construction of the plant should take two and half to three years. Thus, the plant should be operational in 2014," he said.
Verbruggen said NatureWorks would evaluate three criteria before making a decision: feedstock availability, market demand, and incentives from the government.
"If we look back over the past two years, the cassava price in Thailand was quite favourable for us to invest in the business. But now the price is quite high. However, we cannot judge the investment by the price at this time alone. Cassava is a commodity product, whose price goes up and down. So, we have to estimate the price in the near future before we make a decision," he said.
He said the chosen country did not necessarily have to be the biggest market for NatureWorks. However, it should be a country that has the potential to grow and could be a hub for exporting PLA to other countries. For example, if the company chose one of the Southeast Asian countries, it should be the hub for exporting to other Asian destinations such as China, South Korea, Japan and Taiwan.
He said if Thailand was chosen, NatureWorks would consider whether to invest by itself or seek a partner. It is talking with some companies that have petro-based production, as it may need the partner with experience in the conventional petrochemical industry.
However, if it chose to invest by itself, it may establish a plant near the existing production
facility of Cargill, the parent company that wholly owns NatureWorks.
Besides, it can also cooperate with other bioplastic companies such as Purac, the manufacturer of lactic acid, which is the monomer for bioplatic production, if it invests in Thailand. PTT executive vice president Siriwan Chierapong said the company was in talks with many technology owners in the bioplastic industry such as Purac and NatureWorks to invest in a complex PLA manufacturing facility in Thailand.
If the company decides to establish the complex PLA plant, the investment size could be around $500 million to $600 million with production capacity of 100,000 tonnes per year.