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PTT Global Chemicals supports NatureWorks’ Asian expansion

PTT Global Chemicals supports NatureWorks’ Asian expansion, NatureWorks LLC, PTT Global Chemicals, PTTGC, Ingeo
NatureWorks LLC’s partnership with PTT Global Chemicals is set to change the dynamics of the bioplastics market in Thailand and the rest of Asia.

If I were to mention Rayong, Thailand, those in the packaging industry would think, ah production capacity for Asia. Who’s the competition? The who’s who list of packaging giants reads rather well for Rayong: In 1997 SIG Combibloc's Asian Regional Centre started-up. Then in 2001 Kloeckner Pentaplast (Thailand) Ltd began production and by 2007 Tetra Pak (Rayong Factory) Ltd was operational.

We can add another game changer: The recent US$ 150 million equity investment in NatureWorks by Thailand-based PTT Global Chemicals (PTTGC) supports NatureWorks‘ bid to establish a second Ingeo plant in Thailand by 2015. Together with the plant in Blair, Nebraska, the combined global capacity of Ingeo resin is expected to be 320,000 tons. By 2015, NatureWorks LLC will also utilize three different first generation feedstocks of corn, cassava and cane focusing on locally grown feedstocks.

While attending the Innovation Takes Root 2012 conference in Orlando, Vice President Sutin Chamulitrat of Bio Plastic Group, a division of PTT Global Chemical Public Company Limited, confirmed that the two companies are well into their due diligence programs. Essentially, NatureWorks LLC - now jointly owned by US based Cargill Inc and PTTGC - expects to establish a legal entity in Thailand to manage the production of Ingeo resin.

NatureWork’s biopolymer brand, Ingeo, is used in a variety of applications, including packaging film, fabric, and foodservice products. Supporting burgeoning global demand is the motivation behind this expansion phase.

For the Thai petrochemical and chemical company, PTTGC’s investment in NatureWorks presents an opportunity for knowledge transfer and a greater strategic focus on producing bio-based products.

“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,” said PTTGC president and chief executive Verrasak Kositpaisal at the time of the announcement of the partnership.

Fuelled by support from a Thai government, which is keen to develop a strong local bioplastics industry that can then function as a regional hub, and technical and marketing assistance from NatureWorks, PTTGC is well on its way to towards establishing itself as another global player.

According to NatureWorks president and CEO Marc Verbruggen, its partnership with PTTGC will not only strengthen the US company’s balance sheet, but also its commercial presence in Thailand. More importantly, the deal opens a door for NatureWorks to establish production in Asia, where it will be closer to customers and can make greater inroads into the booming Asian market.

Another Asian country NatureWorks is possibly considering establishing a base in is China.

Dan Sawyer, responsible for the New Business Segment of Nature Works LLC, indicated that there is “general government support today for developing a bioplastics industry in China and certainly we’ve expressed the most successful forms of support have been market initiatives that help develop the market prior to building infrastructure to manufacture.”

So the question is, how to go about creating these critical market initiatives?


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PTT Global Chemicals supports NatureWorks’ Asian expansion, NatureWorks LLC, PTT Global Chemicals, PTTGC, Ingeo

Dean Bellefleur is a subject matter expert in packaging consulting to private equity management firms and the Food & Beverage Industry.

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