Burgeoning Bioplastics: Metabolix's Breakthrough

Despite my career in finance, in college I was studying biology in order to enter the Biotech industry, mainly due to Biotech's potential for manufacturing materials (rather than in regards to drugs). While I am confident that fields of plants commercially creating complete plastics will be a reality, we still have some time. Yet a more basic form of plant-based plastics, those made from vegetable products such as vegetable oil or corn starch, is starting to peek its head out. This bioplastics industry has increased its optimism lately since the technology is continuing to develop well, despite remaining challenges and false hopes in the past.

The polymer’s time may have come at last, as early performance problems have been addressed, and manufacturing has become more efficient.

One example is the possible introduction of plant-derived non-biodegradable that are said to be “functionally and chemically identical to their oil-derived counterparts”, such as Brazilian bio-propylene from sugarcane ethanol. Such materials would be able to fit into existing processing and recycling structures, EDS notes.

Another is a polylactic acid (PLA) product from Natureworks in the US, which launched new fermentation technology in 2008 that significantly reduces carbon emissions in line with those of recycled polyethylene terephthalate (rPET). Moreover its lower density is said to mean less material is needed for the same strength product.

Major hurdles include risk of consumer backlash due to issues such as the risk for food price inflation, similar to what happened with Ethanol. Yet with some in the industry expecting cost to be competitive by 2015, one could imagine that premium products could use bioplastics packaging as an eco-friendly selling point as long as the production process is able to avoid the perception that it inflates food prices substantially.

While food price inflation might be a short term risk, due to agricultural supply misjudging demand from this nascent industry one day in the future, it seems there should be enough environmental credentials for bioplastics to command a social-responsibility premium from products which use it. For example, it appears that at least some varieties are compostable.

Well in any case, Mazda (MZDAF.PK) seems to be on board to some degree, given plans to create a car using some bioplastics by 2013, and Dow Chemical (DOW) will have a Brazilian bioplastics facility by 2011.

Being an investment-related site, I'll also note that there's a small US-listed $160m bioplastics player called Metabolix (MBLX). They recently announced a breakthrough producing biodegradable plastic, in switchgrass. So perhaps my dream will come true sooner than expected. It appears to even have half its market cap in net cash, though it probably will need it as the company might not be profitable for a few years. I'm just throwing the reference out there, haven't looked at it yet properly.

Disclosure: No direct exposure to the stocks mentioned.

Comments

[solar jim:]

author said: MBLX: I'm just throwing the reference out there, haven't looked at it yet properly.

You should take a look at it. Unlike all the players you listed above, MBLX has 100% fully biodegradeable bioplastics that degrade in natural environment of soil, water, sand, arid, wet, etc... The players you list above all need secondary treatments to the created plastic to reuse or recycle. They are not use and throw away anywhere products that decompose on their own without secondary treatment of heating or another chemical applied.

MBLX has a commercial plant that will start production by the end of this year. You may have heard of their partner in this project, a little company that's been around for a year or two called ADM. Already have contracts for when production starts. While its small now, their future is huge.

They are the only company that exists that has a fully biodegradable plastic. Their plastic is grown in algae and harvested. Future platforms are switchgrass and oilseeds. The switchgrass program is slated for commercial production in the next couple years.

MBLX plastic can be used in the same production machines that use traditional plastics as well. Check them out when you write another article on bioplastics.

Jun 02 05:06 PM

[Vincent Fer...:]

Great thanks a lot, I'll look into them. Feel free to check out my site too, researchreloaded.com.

Jun 03 01:29 PM

[frflyer:]

solar jim is right.

MBLX, with their PHA, is on the cutting edge of bioplastics. Their process has far fewer steps than those for producing PLA, which requires several fermentation steps and needs to be heated to about 150 F to be compostable. Metabolix uses genetically engineered bacteria to digest plant sugars and starch, producing PHA plastic that is simply harvested.
They have another technology that infuses the bacteria into the germinal stage of switchgrass plants, which then grow with the plastic already in the leaves and stems.
Their new plant in Iowa will use corn as the feedstock, but they expect to use swithgrass in the future.

Jun 07 02:49 PM

[Puzzled in ...:]

MBLX has a remarkable history: three deep pocketed private investors poured some $50 million into the R&D for fifteen years! Their connection with ADM is also un-paralleled. ADM invested on the order of $200 million in the plant that is a joint venture with MBLX. What is your quess as to the market potential if ADM was willing to invest $200 million in the plant.

An interesting side light I heard at a presentation by MBLX's President: they are unable to package yogurt in this material as the yogurt cultures would eat the package!! Really.

Jun 25 03:41 PM

[lntwo:]

My understanding is that they clone in the genes required for PHA production. These genes utilize the plant's carbohydrate production to produce the plastics, giving MBLX an edge over other non-petroleum plastics. That is, the potential to be independent of food carb's as well as the ability to clone in these genes to potential biofuel producing plants.

Long MBLX


On Jun 07 02:49 PM frflyer wrote:

> solar jim is right.
>
> MBLX, with their PHA, is on the cutting edge of bioplastics. Their
> process has far fewer steps than those for producing PLA, which requires
> several fermentation steps and needs to be heated to about 150 F
> to be compostable. Metabolix uses genetically engineered bacteria
> to digest plant sugars and starch, producing PHA plastic that is
> simply harvested.
> They have another technology that infuses the bacteria into the germinal
> stage of switchgrass plants, which then grow with the plastic already
> in the leaves and stems.
> Their new plant in Iowa will use corn as the feedstock, but they
> expect to use swithgrass in the future.

Jun 27 02:14 AM