NatureWorks move puts PTT atop global petrochemical industry
PTT Group has become the world's leading player in the biobased petrochemical industry after its subsidiary PTT Chemical reached an agreement to acquire half of NatureWorks, the world's only manufacturer of polylactic acid (PLA).
The US$150million (Bt4.6 billion) investment will allow the group to have both PLA and polybutylene succinate (PBS) in its portfolio.
A few months ago, PTT set up a joint venture called PTT MCC Biochem with Japanbased Mitsubishi Chemical to open a plant to produce up to 20,000 tonnes a year of PBS, which is used in making bioplastics.
PTTCH will subscribe to new shares of NatureWorks, which will be equally owned by the company and Cargill.
Veerasak Kositpaisal, president and chief executive officer of PTTCH, said the next step was for the partners to co-invest in NatureWorks’ second PLA plant, to be located in Thailand.
They are considering whether to set up a local joint venture for the PLA plant, and whether to use sugar or cassava as the raw material for the plant.
The second plant will have a similar capacity to the 140,000tonne first one in the US state of Nebraska.
The PLA plant in Thailand would not need more than 1 million tonnes per year of cassava or about 200,000 tonnes of sugar, so it would not present a problem for the supply of sugar and cassava for food manufacturers.
“PTTCH will start realising revenue from NatureWorks next year. After we complete the 50percent stake acquisition, we will look for a future opportunity to expand the production of and market for bioplastics with NatureWorks,” Veerasak said.
Marc Verbruggen, president and CEO of NatureWorks, said the investment for the second PLA plant would not be lower than $200 million. It aims to commence commercial production by 2015.
The company has to accelerate construction of the second plant as demand for PLA is growing sharply at the rate of 2530 per cent. Global demand is now about 100,000 tonnes a year, but at the current growth rate, could soar to 250,000 tonnes per year by 2015. It is evaluating this number.
The Thai plant would be the production base for the world market. About 1015 per cent of output would serve the domestic market. The company and PTTCH would have to create demand for the domestic market.
NatureWorks selected PTT Chemical as its partner and Thailand as its second production base because it sees growth in the bioplastic industry shifting to Asia, Verbruggen said.
NatureWorks generates revenue of $150 million to $200 million per year.
A debottlenecking project would increase the existing plant’s capacity to 150,000 tonnes per year by the end of 2012.
Verbruggen said the Nebraska plant had reached the breakeven point by running at 6065 per cent of capacity this year. The Thai plant was expected to break even within two or three years.
