Novamont Acquires BioBag Group

It’s rare these days to hear mergers and acquisitions in the bioplastic community but with investments pouring in especially for biodegradable and compostable plastics production, we will probably hear more financing and buyout activities in this space.

This week,  Novamont announced its acquisition of Norway-based BioBag Group for an undisclosed amount. BioBags has already been using Novamont’s Mater-Bi compostable resins for years in its plastic products. BioBag, a privately-owned company, (formerly known as PolarGruppen) was established in 1959 producing a variety of PE bags, sacks and films.  The PE production was completely phased out in 2003 and BioBag focused solely on compostable and biodegradable products after the company started producing, selling and marketing bioplastics in 1997.

Novamont says the acquisition will allow the company to benefit from BioBag’s highly-specialised independent distribution in areas where the buyer is less present. The companies plan to build more demonstrator waste management projects (e.g. enhance separate organic waste collection and composting systems) especially in North America, the Scandinavian countries, Eastern Europe and Australia.

While Novamont is mainly focused upstream developing Mater-Bi supply chain that ranges from agricultural raw materials, bio monomers, bioplastics and low-impact formulations, BioBag, on the other hand, is focused downstream and in the distribution of a wide range of compostable applications and specialising in a series of support services for these applications.  BioBag has also developed a growing e-commerce platform.

The transaction will reportedly allow Novamont to expand its compostable bioplastics business into North America, Eastern/Northern Europe and Australia. BioBag will continue to operate as an independent organisation.  The company has a turnover of €41M and 135 employees.

By the way, on Amazon.com, a 100 count, 3-gallon food waste compostable BioBag is selling for around $20. The price is actually competitive with an ordinary 3-gallon trash bag with the same count.