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Its biomaterials business up, Cereplast secures added investment, distribution

Cereplast Inc. (El Segundo, CA) recently agreed to privately sell stock and warrants for about $12 million to several institutional investors and signed a distribution agreement with ColorTec to supply its bio-based compostable and sustainable plastics to the Southern Italian and Slovenian markets.

PlasticsToday Staff

February 8, 2011

1 Min Read
Its biomaterials business up, Cereplast secures added investment, distribution

Italian distribution represents an interesting opportunity for Cereplast in light of Italy's plastic bag ban that went into effect in early 2011. Cereplast will provide its Compostable 3000 film grade for use in ColorTec's masterbatch process for making shopping and garbage bags. Cereplast says the 3000 grade is designed for strong puncture resistance, toughness, and processing on existing blown film production lines.

Cereplast says ColorTec has a dominant position in Southern Italy, working closely with municipalities that must conform to the Italy-wide ban on certain types of plastic bags that allows bags made of compostable material. Italy's consumption of plastic bags has been reported as being about 330 per person annually.

The $12 million of private capital, which will net Cereplast about $11 million after fees and expenses related to the transaction, will be used for working capital to fill an order pipeline resulting from European distribution agreements that include not only Italy and Slovenia, but multiple distribution companies in Poland and Romania.

Frederic Scheer, chairman/CEO of Cereplast, Inc., said "The increasing market penetration we are gaining in various parts of Europe gives us greater visibility to outline our growth expectations for 2011."

Cereplast's 2010 revenue was $6.3 million, a 133% percent increase from $2.7 million in 2009. The company says 2010 sales revenue was limited by supply constraints on raw materials from mid-November through December, but that situation has improved and projected revenue for Q1 2011 is between $5.0 million and $6.5 million. Projected revenue for the full year 2011 is between $24 million and $32 million, a 300% to 400% increase compared to 2010.

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