Issue 01/2016

Opinion
By:
Henna Poikolainen and Juulia Kuhlman
Pöyry Management Consulting
Vantaa, Finland
market projections. For instance, the largest biobased
monoethylene glycol project to date – 500,000
t/a in Brazil by JBF Industries – has been put on hold
and some sources expect it to be cancelled. There is
a lot of activity in developing catalytic processes for
bio-MEG but there will be little production available
for P&G, IKEA and alike by 2020.
The future supply looks more promising for PLA.
Corbion succeeded in signing letters of intent for
one-third of the 75,000 t/a capacity planned for their
new facility in Thailand and decided to go forward
with the investment. NatureWorks awarded the
engineering contract of a new production plant in
Southeast Asia to Jacobs back in 2013 but we are
still waiting for news on the location.
Press releases of new bioplastic projects paint
a distorted picture of the supply volumes. Only
few projects reach full capacity with the initially
announced timing. New technologies, developing
markets and exclusive partnerships make the
bioplastics industry demanding, risky and timeconsuming
to enter. Sustainable biomass sourcing
with transparent traceability is a prerequisite for
any collaboration with the major brand owners.
Similarly to Corbion, many producers seek to
secure major offtake of planned capacity prior to a
final investment decision which prolongs time-tomarket.
Project financing is rarely straightforward.
Many bioplastics projects are risky investments
even at high crude oil prices. It is challenging to
convince investors of the profitability of capital
intensive projects when the return on investment is
dependent on a biopremium.
The supply of bioplastics is expected to show
double-digit growth for the next ten years, but the
curve is unlikely to depict as exponential a growth
as project announcements would indicate. Securing
an adequate supply of bioplastics will be a major
issue for the brands aiming to reach their targets
by 2020. Most brands are unwilling to commit to a
single supplier. There should be at least two or three
certified suppliers to secure supply, but this is rarely
the case in today’s bioplastic market. There is great
variation in polymer grades and switching costs are
still too high. Hence, bioplastic producers should
not see new entrants as unwelcome competitors,
but rather as a necessity for market formation. We
foresee more and more partnerships with bioplastic
producers and brand owners. Tight collaboration
with brand owners can speed-up market entry and
take the bioplastics industry to the next level.
www.poyry.com
About the authors:
Henna Poikolainen and Juulia
Kuhlman are both consultants at Pöyry
Management Consulting. Pöyry is one
of the leading advisors to the world’s
energy, forest and bio-based industries.
In the past 5 years, the authors have
been supporting clients e.g. in market
entry, product portfolio and partnering
strategies; in supply, demand and cost
analyses; and in technology evaluation
and pre-feasibility assessments. In
2015, Pöyry published a multiclient
report “BioSight up to 2025” analysing
the supply, demand and dynamics of
the bio-based chemical business: www.
poyry.com/biosight
bioplastics MAGAZINE [01/16] Vol. 11 27