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Cereplast gives up compounding

Shortly after signing two new customers, including its largest-ever contract, biobased resin producer Cereplast (Hawthorne, CA) has reconfigured its strategic plan of resin and application development plus compound production, eliminating manufacturing.

Shortly after signing two new customers, including its largest-ever contract, biobased resin producer Cereplast (Hawthorne, CA) has reconfigured its strategic plan of resin and application development plus compound production, eliminating manufacturing. Frederic Scheer, Cereplast chairman and CEO, told MPW the company had decided that of its three areas of focus—resin development, application development, and manufacturing—manufacturing was the least lucrative, adding that the level of excess toll compounding capability in the U.S. and Europe made it hard for his company to manufacture Cereplast compounds in house for a price that was cheaper than what the market could offer.



Georgia-Pacific applies Cereplast Compostables resin based on NatureWorks PLA for its line of Dixie EcoSmart cups.


As part of its original plan, the company built out a new 105,000 ft2 facility in Seymour, IN with 50 million lb/yr of capacity in addition to expanded capacity at its Hawthorne, CA headquarters, which has 40 million lb/yr of production capability. Scheer said that the Seymour site is ready to go, but moving forward, Cereplast is seeking a partner to operate the facility and is in the midst of talks with “several groups.” Cereplast will also move production equipment that’s currently in California to Indiana, bringing Seymour’s total capacity to 90 million lb/yr with three compounding lines.

One day before the manufacturing announcement, Cereplast released news of its largest-ever contract to supply extrusion coating compounds to Georgia-Pacific for its line of Dixie EcoSmart cups. The Cereplast Compostables resin-lined paper hot cups are made from at least 95% renewable resources, with an Insulair line of insulated cups available with 12% and 25% post-consumer recycled fiber. Cereplast developed the coating grade based on NatureWorks Ingeo PLA. Scheer said work on the cup goes back a year-and-a-half, with Georgia-Pacific announcing the new product at the National Restaurant Show in Chicago. Usable for hot or cold drinks, the cup’s coating boasts a head-deflection temperature of 220°F. Two weeks prior, Cereplast reached an agreement with Dorel Juvenile Group to supply it with Compostables.

Scheer said that at its largest, Cereplast reached 65 employees last year, but by the end of 2008, the number had fallen to 37, and at this point, the company employs 25 following the move to jettison manufacturing. Scheer expects that number to rise in the short term as it adds staff to its R&D and sales and marketing teams. [email protected]
TAGS: Materials
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