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One of Asia's leading suppliers of polyethylene and petrochemicals, Thailand's PTT Chemical, is investing $150 million in NatureWorks, the Minnetonka, Minnesota-based supplier of the Ingeo brand of polylactic acid-based bioplastics. NatureWorks has been actively searching for a site in Asia for a new facility and now also announced that Thailand is the preferred location for its next Ingeo manufacturing facility.

PlasticsToday Staff

October 12, 2011

4 Min Read
UPDATED: PTT Chemical plans $150 million investment in bioplastics supplier NatureWorks

One of Asia's leading suppliers of polyethylene and petrochemicals, Thailand's PTT Chemical, is investing $150 million in NatureWorks, the Minnetonka, Minnesota-based supplier of the Ingeo brand of polylactic acid-based bioplastics. NatureWorks has been actively searching for a site in Asia for a new facility and now also announced that Thailand is the preferred location for its next Ingeo manufacturing facility. Steve Davies, global director for marketing and public relations at NatureWorks, told PlasticsToday that when the deal finalizes, PTT Chemical will hold a 50% stake in the company, splitting ownership with agricultural giant, Cargill.

NatureWorkspressconference.jpg

PTT Chemical, NatureWorks press conference.

From left to right: Marc Verbruggen, NatureWorks; Veerasak Kositpaisal, PTT Chemical; and Paul Conway and Pete Hawthorne of Cargill take questions during a press conference in Bangkok announcing PTT's equity investment in NatureWorks.

"[This investment] is a great vote of confidence from, really, the mainstream chemicals industry," Davies told PlasticsToday. "We're no longer owned by somebody seen as an agricultural guy, Cargill, we're part of the mainstream." Davies alluded to past NatureWorks investors with petrochemical ties, namely Dow and Teijin, but added that this time is different. "With PTT investing to help us build a second site and really accelerate our growth, it's exciting."

PTT Chemical's investment in NatureWorks, which until now has been wholly owned by food processor Cargill, is subject to regulatory approval. It follows on other investments the company has made recently in its bid to be "ideally positioned to address the growing global demand for bio-based products within and beyond the region, and to build world-class production capacity," as worded in a press release last week.

Although details around the location of the new production plant and whether it will be an integrated site, creating and polymerizing lactic acid, or simply buying it, Davies said the end result will be a doubling of NatureWorks global Ingeo PLA capacity, which stands at 140,000 tons today with all production in Blair, Nebraska.

Only days ago PTT Chemical announced that Myriant Corp., a PTT strategic partner, had successfully developed a proprietary process to produce bio-based chemicals, including succinic acid and lactic acid, from non-food cellulosic feedstocks. This technology reduces carbon footprint, according to the companies, while ensuring high levels of quality and contributing to stabilizing of long-term market prices. Lactic acid is the precursor to PLA, the basis for the Ingeo materials.

Davies said his company's two-year global search for a second site sought to fulfill three primary criteria: feedstock availability, end-market activity, and incentive packages. Thailand fit all three bills giving the company access to sugar cane and cassava feeds; a regional window on to its fastest growing market of Asia; and strong support of the Thai government.

Veerasak Kositpaisal, president and CEO of PTT, announced, "PTT Chemical and Myriant are working together on the immediate roll-out of succinic acid and its derivatives such as BDO, in South East Asia, for which details are to be announced soon." The Thai government is an eager supporter of domestic companies' efforts to set up bio-based businesses in the country. Commenting on the investment in NatureWorks was Thailand's Minister of Energy, Pichai Naripthaphan, who said, "The Thai Government encourages an investment in green chemicals, and particularly bioplastics, which have high growth potential in the Southeast Asian market. By attracting what could be the most advanced biopolymer processing plant in the world to Thailand, PTT Chemical has made a significant step in achieving Thailand's strategic objectives of becoming a regional hub for green technologies and solutions." 

Earlier this year PTT Group entered into two strategic partnerships for bio-based chemicals. In January 2011, PTT Chemical entered into a strategic partnership and invested $60 million in Myriant, an industrial biotechnology company. In February 2011, PTT announced the formation of a joint venture with Mitsubishi Chemicals, called PTTMCC Biochem, to develop a commercial scale bio-PBS plant in Thailand.

Marc Verbruggen, president and CEO of NatureWorks, said in a company release that with PTT's investment, his company anticipates bringing its new plant online in 2015. Details on the capacity of the plant have not yet been decided. In the last two years, NatureWorks doubled its Ingeo supply availability by bringing online additional production capacity at its Blair, NE processing facility. The proposed new Ingeo facility in Thailand would be NatureWorks' second production plant.

Nuttachat Charuchinda, the COO at PTT, added, "PTT Chemical is keen to play a role in pioneering a world-scale bioplastics industry with the aim to become a global leader by 2020 and push Thailand to become an Asian bio-hub." 

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