PTT plans green plastics venture: Mitsubishi arm joins hands to tap low costs
Jul 23, 2010 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX) --
Copyright (C) 2010, Bangkok Post, Thailand
Thailand's national oil flagship PTT has joined with Mitsubishi Chemical Corp (MCC) to build the first biodegradable plastics plant to serve the rising global trend, says Prajya Phinyawat, PTT's chief operating officer for downstream petroleum business.
The two companies are studying the possibility of investing first in downstream biodegradable products, including polylactic acid (PLA) and polybutylene succinate (PBS).
Dr Prajya said that while the size of thye investment had yet to be determined, the production capacity should be at least 30,000 tonnes yearly to achieve economies of scale.
There is no local production for PLA in the country but US-based Natureworks has planned to begin such an operation in 2013.
Dr Prajya said the two types of downstream biodegradable plastics were in high demand amid the rising awareness of climate change.
As one of the world's major producers of cassava and sugar, Thailand has abundant supplies of the raw materials for bioplastics production, making it a competitive, low-cost location for production.
"We could very well be the lowest-cost producer in Asia. Although biodegradable plastics are quite new in the local market, demand will definitely catch on in the next few years. There is no cause for concern because [the demand] is growing in other countries," Dr Prajya.
"Also, once the global economy is back on track, biodegradable [plastics] will gain in popularity, probably in leaps and bounds given the green product trend. We will see consumer products makers and the food sector use biodegradable plastic packaging in a bid to add value to their products."
To spur local demand initially, PTT introduced its first bioplastics to the domestic market a month ago by importing biodegradable resin from Mitsubishi's production plant in Japan.
PTT and MMC, its key bioplastics partner, will co-invest in two plants, a downstream biodegradable resin plant and an upstream plant, said Hiroaki Ishizuka, managing executive officer for supervision petrochemicals.He added these plants would be MCC's second biodegradable plastics production base in Asia. Thailand was picked due to its plentiful tapioca starch and sugar resources and full government support.
"Given the local government's support and rich crops of raw materials, we are confident in setting up a base in Thailand. It is a right decision as it is going to be a facilities with the lowest production cost in the world," said Mr Ishizuki.
The two companies yesterday also signed a memorandum of understanding with the National Innovation Agency and the Ministry of Environment and Natural Resources to build a 5-million-baht organic fertiliser factory from organic waste on Koh Samet, Rayong.
Organic waste will be managed and separated by using biodegradable plastic bag. Ranked among the top garbage-producing areas, the resort island generates six tonnes of waste daily.
Shares of PTT closed yesterday on the SET at 242 baht, down three baht, in trade worth 1.31 billion baht.
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