Frederic Scheer, Cereplast's chairman and CEO, sees that demand coming, citing a European Plastics study stating that the market for bioplastics in the European Union is expected to be 1 million tons by 2014. "We believe this new plant will create efficiencies, reduce transportation costs, and minimize risks in our business," Scheer said. "This new manufacturing facility will position Cereplast to effectively serve that expanding market."

Cereplast said the plant will be developed near Assisi in Umbria at the site of an existing industrial plant and cover 125,000-ft². The building is currently permitted as a chemical site, which allows Cereplast to utilize existing infrastructure.

The plant will be owned and run by Cereplast Italia SPA, a wholly owned subsidiary of Cereplast Inc., with financing through local and regional financing with Italian institutions as well as subsidies from various state and local agencies. The initial investment is estimated to be about €10 million to €12 million, with around 150 jobs created.

In 2010, Cereplast opened a new manufacturing facility in Seymour, IN with an 80 million lb of production capacity. Prior to that in 2006, the company added 45 million lb of production capacity at its initial plant in Hawthorne, CA.

Novamont, which manufactures the Mater-Bi line of bioplastics, is also located in Italy with its headquarters in Novara, about 30 miles west of Milan, and manufacturing in Terni, in southern Umbria. In 1996, Scheer, was granted the exclusive North American distribution rights to Novamont's Mater-Bi resins.