01/11/2011

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THAILAND: Public-private venture proposed for bioplastic - Science ministry ready to commit B300m

The Science and Technology Ministry plans to form a one-billion-baht joint venture with PTT Chemical Plc (PTTCH), Siam Cement Group (SCG) and Mitr Phol Group to build Thailand's first polylactic acid pilot plant to supply materials to make biodegradable plastic.The ministry will finance 30%, while the three companies would decide whether to invest individually or collectively, according to a source who asked not to be named.The plant is expected to have annual production of 10,000 tonnes.The government has been pushing for a biodegradable plastic project since 2008 in order to add value to the country's cassava and sugar industries.Although future demand is promising, given rising environmental awareness, bioplastics cost five to six times more than petroleum-based plastics.As a consequence the ministry decided to finance the project and help make it commercially viable.A feasibility study by the ministry suggested that with 30% public funding, the venture could generate a return on investment of 13%, compared with only 5-6% if no public funding were available.The source said Thailand could become a regional base for biodegradable plastic because of its abundance of sugar and cassava, and an extensive downstream polymer industry, so full integration requires only the development of a midstream industry.The ministry will submit its financing proposal for cabinet approval tomorrow (28 Dec. 2010), in hopes of getting a plant up and running by 2013. The location would be decided by the business partners.Veerasak Kositpaisal, president and chief executive officer of PTT Chemical Plc, said the development of bioplastics in Thailand had been delayed because of the high cost of technology, while the quality of finished products still did not meet the needs of plastic users.He said the bioplastic plant was consistent with the company's plan to expand beyond fossil polymers into biopolymer. This will challenge the company to do more research to develop its own technology.Although bioplastic is expensive now, prices will come down as many polymer producers and raw material suppliers were spending heavily on R&D, he said.Bioplastics now account for only one percent of total plastic consumption.Once the cabinet approves the ministry's proposal to commit project finance, PTTCH would study its role in more detail, he added.(Syed Rashid Ali, Karachi, Pakistan)

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