Natureworks: Market Development for Bioplastics
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Case Details:
Case Code : MKTG169
Case Length : 23 Pages
Period : 1997-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : NatureWorks
Industry : Chemicals and Petrochemicals
Countries : USA
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Excerpts Contd...
Market for PLA Expands
However, NatureWorks' fortunes soon changed for the better. The market for PLA
began to expand from 2005, due to increasing petroleum prices (Refer Exhibit
VIII for corn and petroleum prices). With the price of PLA becoming more
competitive vis-à-vis conventional polymer resins (Refer Exhibit IX for more
information on the packaging industry), more and more converters began showing
interest in PLA and approaching the company for joint product development. For
example, in 2005, the Lacerta Group began to explore new thermoforming
applications for NatureWorks PLA...
Challenges
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Though the prospects for PLA had improved, NatureWorks still faced several
potential roadblocks. To begin with, some critics argued that bioplastics were
not as environment-friendly as they were made out to be. According to them, the
energy to operate farm machinery, irrigate growing crops, produce fertilisers
and pesticides, transport crops and crop products to processing plants, and
extract the processible biomaterials came, in all probability, from
non-renewable energy sources. Even the factory that eventually manufactured the
bioplastic materials would be powered by petro-based fuels.
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Even though NatureWorks claimed that the production of PLA consumed less
conventional fuel compared to the production of polyethylene -- partly
because it used renewable energy in its manufacturing plant -- many critics
remained unimpressed...
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Outlook
In November 2006, in what seemed a blow to its environment-friendly image,
NatureWorks was fined US$ 60,000 for incorrect assessment of its plant's VOC
emissions. It was also ordered to fund a greenhouse project at a local high
school. The company announced that it would immediately install regenerative
thermal oxidators to reduce emissions to meet regulatory standards. In 2007,
NatureWorks promoted the use of its PLA in pressure sensitive labels .
Traditionally, petro-based plastics were used to make pressure sensitive labels...
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Exhibits
Exhibit I: Cargill Product Portfolio
Exhibit II: PLA Manufacturing Process
Exhibit III: Characteristics of PLA
Exhibit IV: The Corn Mascot
Exhibit V: Advertising Natureworks
Exhibit VI: The Natureworks Logo
Exhibit VII: Applications of Natureworks PLA/Ingeo Fiber
Exhibit VIII: Corn and Petroleum Prices
Exhibit IX: The Packaging Industry
Exhibit X: Recycling Plastic
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