Metabolix partners with Tianjin GreenBio

I entered my 3*th year this weekend suffering from a bad cold but the good news is that there will be no more traveling until early May when I have to present a Biobased chemical feedstock paper at the Asia Petrochemical Industry Conference (APIC) along with other Tecnon OrbiChem consultants.

I have two weeks to prepare for that presentation so this should be fun!

In the meantime, let me post my last week’s interview with Metabolix CEO Rick Eno regarding their recent announcement on their partnership with another PHA (polyhydroxyalkanoate) producer Tianjin GreenBio Materials Co. Ltd. (“GreenBio”). The company is based in Tianjin, China and has a current capacity to produce 10,000 tonnes/year of PHA in Binhai District. Another interesting information about this company if readers recall is that Dutch chemical firm DSM actually has a stake in this PHA production when DSM invested $20m in GreenBio in 2008.

Under the Metabolix-GreenBio partnership deal:

• Metabolix will distribute GreenBio’s SoGreen heat shrink film in Europe and will be the exclusive distributor in the Americas
• GreenBio will supply PHA resins to Metabolix, which will extend the range and availability of Metabolix’s PHA products

Let’s analyze first the heat shrink film distribution agreement. According to Eno, the heat shrink film market in Europe and the US is worth around $2bn, and the film market has always been a strategic target for Metabolix. The company launched last year its Mvera B5008 compostable film grade resin, which is designed for consumer compost bags, can liners for commercial compostable food waste and shopping/retail bags that can be reused as consumer compost bags.

Majority of the plastic film market is composed of LLDPE (low linear density polyethylene), HDPE (high density PE), LDPE (low density PE), and propylene. Degradable films are expected to show the fastest growth. I have to refer to Tecnon OrbiChem for more information about the current market economics for these type of plastics.

Under the deal, Metabolix will primarily sell GreenBio’s products (currently being marketed in China) through its channels in the US and Europe.

Another, more interesting information on this press release is GreenBio’s PHA supply deal to Metabolix. As readers recall, Metabolix had a supply fall-out last year in January when its former partner Archer Daniels Midland (ADM) broke off their PHA joint venture Telles and ADM stopped manufacturing PHA at its 50,000 tonne/year Clinton, Iowa, facility.

In August, Metabolix announced a PHA manufacturing deal with Spain-based Antibioticos. Metabolix expects to initially produce 10,000 tonnes/year of its Mirel PHA resins in Antibioticos’ Leon facility. According to Eno, Metabolix has already transferred its technology to Antibioticos and that the Leon facility is ideal for PHA manufacturing. Unfortunately, Antibioticos is currently undergoing financial restructuring and that there is no definite date yet when Antibioticos will start producing the Mirel PHA.

“We are monitoring the situation with Antibioticos. The ball is in their court now to demonstrate to us when they successfully concluded their financial restructuring.” – Eno

In the meantime, the recent deal with GreenBio will enable Metabolix to continue to supply their customers with PHA-based products. Eno said they have been working with GreenBio for a year now and both companies are committed to build the markets for PHA-based materials.

“We wanted to make sure that we have a diversity of supply to our customer based. In any new business, customers get concern of having just one source of supply. We have very good channels for GreenBio’s products into Europe and US, and at the same time, they have an operating plant where we are already familiar with their products. With this foundation we realize that it will be helpful to have a collaboration instead.” – Eno

According to Eno, the PHA resins that will be supplied by GreenBio will extend Metabolix’s product ranges as well as broaden their portfolio. Metabolix can either sell the PHA resins directly or blend the resins in their own products depending on the application that their customer needs.

Metabolix is also constantly on the lookout for other PHA supply partnerships as well. However, Eno reiterated during the company’s recent earnings call that their long-term option is still to have its own production site to expand the market and lower their costs.

“We are deeply committed to grow the biopolymers market. We are able to work with multiple parties in collaborative way. People are approaching us and we are approaching others to try to think of ways we can best work together to grow the biopolymers market. It’s a relatively small market compared to petroleum-based plastics but it is highly innovative — it is moving and growing dramatically. We are keen to work with other companies to help grow this market. There is enough market for everyone to grow.” – Eno

The company’s strategy, according to Eno, is not to compete with large volume plastic materials, which are selling at low prices, but to target higher-value, highly functional resins applications where PHA’s unique attributes can bring value to customers. Metabolix’s current focus are on the film markets particularly compostable and degradable films; performance additives such as in modification of polyvinyl chloride (PVC) formulations (example is its recently launched 16001 PVC modifier) and even PLA (polylactic acid) formulations; and “functional biodegradable polymers”.

Metabolix said it currently has over 70 customers in total, and achieved quarter-on-quarter sales growth of 33% over the third quarter of 2012.

With regards to their biobased C3 and C4 chemicals program focusing on PHA-based butanediol (BDO), gamma butyrolactone (GBL) and acrylic acid, Metabolix said it is now using its “FAST recovery process” which converts biopolymers such as poly-4-hydroxybutyrate (P4HB) directly to GBL using heat, and GBL can be converted to BDO using known catalytic processes. The FAST process is also being used for making acrylic acid.

Eno said the company is in a number of discussions about partnerships and collaborations on the C3 and C4 areas.