Plantic Technologies Share Discussion Threads

[ny boy] 08/7/2010 11:43

What's up here a few buyers, surely not ? LOL!

Onwards & upwards from here, early bird takes all the gains!

[the_doctor] 08/7/2010 08:46

mm2

while the negatives are obvious,
there's good news on the horizon:
- US subsidy
- K-P deal expansion
- Resin trial update and deal with global leader
- contract news
- Further alliance with National Starch
- loan from partner

Importantly, unlike most other large players, National Starch's acquiror has no bioproduct subsidiary, so a tie-up with PLNT is still very much on the cards.

BM knows the issues and I suspect the plan will be to push the share price upwards in this half of the year.
The market cap is low and the story strong, so it wouldnt take much retail interest to lift the share price sharply....

[themoneymonster2] 08/7/2010 08:24

Couple of early buys today, 1 on lse for 18k and 1 on plus for 45k. Hopefully the turning point with the market?

[kooba] 07/7/2010 10:30

will have to be pretty extraordinary news to get this shareprice moving as we have the sword of damocles of a equity fundraise hanging over us.
if alternative finance or a strategic investor were to fill the impending funding gap then maybe a different story..but in the meantime there are persistant sellers in the market and can unfortunately only see one way for the shares until funding resolved.
any good news short term will be the point of a fundraise so dilution will occur at an effective pre news price.
agree the company seems to be positioning themselves reasonably well though not judging that by actual revenue and have undoubtedly been relatively slow to market opportunity in a competitive environment...perhaps that is because up until now they have been happy to sit back and wait for it to happen as they ploughed through lumps of shareholders cash [including mr merchant's of course] now the coffers are dry they might actually have to make something happen to secure additional funding to keep the pay cheques rolling.

[the_doctor] 07/7/2010 09:10

kooba

Brendan is ok. He'll still get paid and doesnt really have any shares.
Is is doing a very good job in terms of strategic positioning though.

Bear in mind that Gordon Merchant is closely tied to the board

I've also emailed Brendan. The expectation is that good news over the next few months will help lift the share price
Funds may also come via a loan

[ny boy] 07/7/2010 08:56

Just a matter of time before investors twig that this is grossly under-valued! Patience require, when it moves up, it will be very fast moving.

[divinausa1] 06/7/2010 09:27

had contact with the company yesterday

just pointed out the last rns

Sales of product sold in the 5 months to the end of
May have increased by approximately 80% compared to the second half of 2009,
with revenues 50% higher.

[themoneymonster2] 06/7/2010 09:18

Kooba

Cotact this guy at Matrix and tell him PLNT are not responding to your emails. He is the broker at Matrix dealing with PLNT, maybe he can answer your questions?

[e-mail]

[kooba] 06/7/2010 09:16

btw mm2 still no response to my email sent on 29th june...not sure a new age of better communication is upon us yet!

[themoneymonster2] 06/7/2010 07:54

Yep good luck tryin g to buy when it turns. I remember wanting 30,000 shares when the share price was 8.75p to buy and the mm's did not want to sell me any. Since then they have dropped the price on low volume and you can now buy quite a few at a time, probs up to 125,000 but when the share price turns they will turn the limits the other way. That's aim for you.
Couple of big hitters on the shareholder list will wanting to be multi bagging, not selling at 5p.

[kooba] 06/7/2010 06:42

couple of players on the shareholder list!
founder of ip group technology transfer pioneer.
David Norwood

Full name David Robert Norwood
Country England
Born 3 October 1968
Farnworth, near Bolton, Lancashire, England
Title Grandmaster
FIDE rating 2503

David Robert Norwood (born 1968) is an English chess Grandmaster,[1] chess writer, and businessman.

The son of an electrician, Norwood read history at Keble College, Oxford University before joining city investment bank Banker's Trust in 1991. FIDE awarded him the International Master title in 1985 and the International Grandmaster title in 1989. He is less active as an over-the-board player these days, but maintains a strong interest in chess as a member of the Internet Chess Club. He has on a number of occasions captained, managed, or sponsored the England squad in major team events such as the Olympiad.

Norwood has written several books including Winning with the Modern (the Modern Defence being a favorite opening of his) and Steve Davis plays Chess (co-authored with Steve Davis). He has also written many articles on chess for the Daily Telegraph.

Norwood is Director of Special Projects at IP Group plc.

He also made a large donation in 2001 to the British Chess Federation to assist with the development of junior chess.

alan miller former star fund manager

[divinausa1] 06/7/2010 01:11

PUGUGLY - 5 Jul'10 - 18:15 - 502 of 521


A real cash burner

"Our cash position is expected to be approximately A$9.2m as at 30 June 2010" which at current exchange rates is £5,119,800

Thse boys look as though they are going to need refinacing as appear to have burnt through £6 million since this thread was started.

Thanks to greengiant - 27 Jun'10 - 09:54 - 423 of 501. for some basic calculations -

Cannot see any more reason to buy at this price than to buy PDX !!!
==============

got into pdx at 38p now over 2 pounds

in here after the trading update, which i think the market has overlooked(from the horses mouth Brendan Morris thinks so too!)

time will tell....

[themoneymonster2] 05/7/2010 22:31

Fair comment. All the best gg.

[greengiant] 05/7/2010 21:43

tmm2.

LOL - Yes I own FAN (over 4% actually), also own over 250k FDP shares, 15% of TND, 5% of RNSM and have just bought over £300k of RRL. I have some stinkers as well as some winners - luckily, life has been good and I have had more winners than losers.

I made a lot of money in this sector, and I understand it. I posted on TIME stating that the product was not commercially viable. I posted on BPI stating that plastic costs had gone up, the next day the company released a IMS stating exactly that.

The information I post is for information only, I hold no position.

gg

[themoneymonster2] 05/7/2010 21:23

So around 30-40% of shares are in free float, rest are taken by institutions and private investors. Ony 80 million shares in issue currently. Probably will issue around 60-70 million shares around 7-8p to get the desired A$10 million. Still would only be 150 million shares in issue.

[themoneymonster2] 05/7/2010 21:19

SHAREHOLDERS
Figure 11 summarises the main shareholders.
Figure 11: Main Shareholders as at 31 March 2010
Shareholder Holding (%)
Gordon Merchant 18.4
Lynchwood Nominees 9.1
UBS (Luxembourg) SA 5.6
Halifax Life 3.8
HSBC James Capel as principal 2.4
Swisscanto Equity Climate Invest 2.2
Alan Miller 1.5
Penson/Nomura Code private clients 2.0
Jolimont Capital 2.0
David Norwood 1.0
RAB Capital 2.0
Hermes Pension Management 1.7
KBC Funds 1.4
Ashcourt Private Clients 1.4
Barclays Bank (Suisse) SA Geneva 1.4
Lansdowne Funds 1.2
ANIMA Emerging Markets 1.2
EVO Nominees 1.1
KBC Funds 1.1
Citadel Investments BVI 1.1
Rowan Dartington Private Clients 1.1
Source: Plantic


FINANCIALS AND VALUATION
The 2009 financials reflect the difficulties experienced by the whole plastics industry
plus the specific issues with DuPont. 2009 revenue was A$1.0m (2008: $3.6m) with
a net loss of A$10.8m (2008: A$9.8m). Cash at the end of 2009 was A$15.6m.
Our estimates for 2010 and beyond assume that the agreement with Klöckner
Pentaplast produces results and show revenues increasing to A$5.7m in 2010 and
A$17m in 2011. We estimate the company becoming profitable in 2013. We have
modelled the company raising A$10m in 2010 at a price of 8p per share which leads
to a dilution of 48%.
Our valuation is based on a DCF analysis with a terminal value based on year six
FCF and a WACC of 20% to reflect execution risk. In arriving at a target price of 19p
we have assumed full dilution with the A$10m raising described above.
Clearly achievement of rapid sales growth is essential to support our valuation and
we announcements of sales progress will be catalysts for the share price. We also
anticipate announcement of a partnership with a major compounder regarding
ecoPlastic™.



Matrix Corporate Capital LLP
One Vine Street
London, W1J 0AH
[phone]

[themoneymonster2] 05/7/2010 21:17

In the UK all major retailers have made commitments to greater sustainability and in
particular in the area of reducing the environmental impact of packaging. As well as
the sustainability drivers, Sainsbury's note the volatility of oil prices and see
bioplastics as a hedge against that volatility.
Structure of the Industry
In order to understand Plantics's business model it is important to understand the
structure of the plastic packaging industry. Commodity resin producers supply resin
to compounders who add colours, stabiliser and polymer packages to produce a
polymer that meets the specific requirements of converters. Converters turn specific
resins into a wide range of products through injection or blow moulding, rigid sheet
production or film production. This structure is shown in Figure 10.

RISK FACTORS
We have identified the following risks to Plantic.
Dependence on large partners: Although a strength, dependence on large
partners can also be a weakness due to their slow decision making cycle and the
fact that Plantic's business is only a tiny fraction of their total activities. Although the
new agreements have very large potential they still have to be executed and deliver
sales growth.
Interest in sustainability issues declines: Although we consider this unlikely it is
possible.
Switch in favour of recycling as opposed to biodegradability: As we have seen
there is conflict between biodegradability and recycling with some commentators and
market players preferring to opt for total recyclability as opposed to biodegradability.
We believe, however, that within the large and very diverse packaging market place
there is room for both solutions.
Oil price falls: The cost competiveness of Plantic's products is partly driven by the
oil price and a low oil price will make it harder to compete with conventional oil
derived plastics. Having reviewed the oil supply situation in some depth we consider
that the oil peaking argument is correct and that we are likely to face oil supply
constraints, leading to higher oil prices, once the world comes out of recession.
Failure to obtain cost comparability with oil based plastics: Despite the powerful
drivers in favour of bioplastics they are unlikely to obtain mass acceptance until they
can achieve cost comparability with oil derived alternatives.
Technology problems: The core Plantic technology is well proven and the
development issues are around utilising it to produce specific functional
requirements for different end users. We consider technology risk small. Plantic has
already demonstrated that their products can be produced on conventional plastic
industry machinery.
Supply chain: Plantic's product is dependent on the supply of high amylose corn
which is produced by National Starch in the USA and by Penford in Australia.
Industrial starches have been grown for decades and are used in many applications.
Compared to biofuels the amount of land required to supply current and projected
needs is low and supply is on long-term contracts
Execution: Although we believe that management has now adopted the correct
strategy and the company is heading in the right direction there still remains
execution risk. The next twelve months, and the evolution of the new agreements,
remain critical for the company.

MANAGEMENT
Brendan Morris – Chief Executive Officer
Mr. Morris was appointed CEO in January 2008 having joined Plantic in 2004 as
Finance Director and Chief Operating Officer. During his time at Plantic, Mr. Morris
has played an instrumental role in Plantic's commercial and development
agreements with Amcor, DuPont, National Starch and Bemis. He was also intimately
involved in three capital raisings, including a successful listing on the Alternative
Investment Market (AIM) of the London Stock Exchange. Prior to joining Plantic, Mr.
Morris spent seven years with Basell Polyolefins as CFO for their Flexible Film and
Resin businesses in Australia and Thailand. Basell is the world's largest producer of
polypropylene and advanced polyolefins products, a leading supplier of polyethylene
and catalysts, and a global leader in the development and licensing of polypropylene
and polyethylene processes. During the same period, Mr. Morris was also a Board
Director of PolyPacifc (a resin compounding business) with operations in Australia
and Malaysia. Prior to joining Basell Mr. Morris was CFO of APV's Global
Contracting and Engineering business based in London and before that in strategy,
commercial and financial management roles with APV Sales and Engineering
business based in Australia and then in Denmark. Prior to his management career in
commerce, Mr. Morris was a senior accountant with KPMG in Melbourne. He holds a
Bachelor of Commerce degree from Deakin University and is a member of the
Institute of Chartered Accountants in Australia.
Norbert-Rainer Schmidt – General Manager, Europe
Mr. Schmidt joined Plantic in October 2007 as the General Manager of the European
division. Based in Jena, Germany, he oversees the company's operations and
developments while continuing to develop business opportunities in this market. Mr.
Schmidt is also the Managing Director of Plantic's subsidiary in Germany, Plantic
Technologies GmbH. Before joining Plantic, Mr. Schmidt was the Managing Director
of Pharmatec GmbH in Germany, Switzerland, Russia and the UK. Pharmatec
provides the production, storage and distribution of pharmaceutical utilities. During
his time at Pharmatec, the company's annual sales increased by €12 million.
Between 1997 and 2003, Mr. Schmidt was the Managing Director of Sales,
Marketing and Technology for several companies including: Weiss Klimatechnik
GmbH; Weiss GWE GmbH; OOO Weiss Technik; and Weiss Klimatechnik Spooz.
During this period, he was also Chairman of BDK Luft und Reinraumtechnik
GmbH.Prior to this, Mr. Schmidt was the Managing Director of APV Engineering in
Crawley, England. In this role, he supervised engineering, contracting, unit systems
and service for the food, pharmaceutical and cosmetics industries. The
pharmaceutical business was established under Mr. Schmidt's direction. Mr.
Schmidt's previous roles also include: Managing Director of Anton Steinecker
Maschinenfabrik GmbH; Technical Leader and Senior Project Manager at Fresenius;
and Project and Sales Engineering roles at SMS Verfahrenstechnik GmbH and Colt
International GmbH. Mr. Schmidt graduated from his Engineering degree with
honours. He completed his Master of Science in Process Engineering and Energy at
the University of Applied Science Giessen.
Ian Wightwick – Chairman of the board of directors, member of the Audit,
Finance and Risk Committee and the Human Resources and Remuneration
Committee
Ian Wightwick was appointed to the board as an independent non-executive director
and elected chairman in October 2006. Mr. Wightwick has had a 50-year career
spanning technical, marketing, production, consulting, general management and
chief executive roles in the oil, chemical, food and paper and packaging industries.
Aside from his role at Plantic, his current activities include investment management,
consulting and mentoring (both at national and international level).

[themoneymonster2] 05/7/2010 21:16

over how best to dispose of them and have now switched to 100% recyclable
plastics.
Despite these issues the market for bioplastics and biodegradable plastics is
growing. The National Non-Food Crops Centre, in York, which co-ordinates British
research into renewable polymers, has forecast that biodegradable plastics could
make up 10% of the world's $1,600bn polymer industry by 2020.

THE MARKET
As Sam Knight of the FT said: "Plastics are the forgotten infrastructure that allows
modern urban life to exist".
The Global Plastics Market
The global production of all plastics has grown significantly over the last 60 years,
increasing from 1.5m tonnes in 1950 to 260m tonnes in 2007, a CAGR of 9.5%
(source: PlasticEurope Market Research Group). In 2008, in response to the global
financial crisis, production fell to 245m tonnes, the first time production had fallen
since 1974. The industry expects growth to begin again as the world moves out of
recession. Plastic prices also fell 30–40% in 2008/09 but as shown in Figure 8 have
now started to recover, in the case of LLPE (linear low density polyethylene) to
c.$1,000/tonne compared to a low of c.$600/tonne and a peak of more than $1,700
per tonne in mid-2008.

According to the Plastics Federation, in the UK plastic consumption has grown from
c.2m tonnes in 1973 to c.5m tonnes in 2008 and c.35% of this consumption is for
packaging.
A 2008 PIRA study estimated that rigid plastics made up 25% of total packaging
materials and flexible plastics 14% and demonstrated 6.3% and 6.2% growth
respectively. Rexam plc, a leading packaging company, estimates that the global
packaging market will grow 2–4% per annum in the foreseeable future and that the
use of plastic is growing faster than any other material.
The Market for Bioplastics and Biodegradable Plastics
Statistics on the actual and potential markets for bioplastics and biodegradable
plastics can be confusing due to differing use of definitions and the fact that
biodegradable plastics includes non-bio, i.e. oil derived plastics that have been
altered to be biodegradable. We have drawn on several sources here.

In 2001, COPA (Committee of Agricultural Organisation in the European Union) and
COGECA (General Committee for the Agricultural Cooperation in the European
Union) undertook a market review of bioplastics which estimated that half of the six
million tonnes of disposable plastic packaging in the European Union could be
substituted by bioplastics.
The bioplastics sector has seen rapid growth and the European Bioplastics (the
trade association of the bioplastics industry), estimates that annual global production
of bioplastics will increase six-fold to 1.5 million tonnes by 2011, up from 262,000
tonnes in 2007. It should be noted that this will still only be c.0.6% of total plastics
production.
The Helmut Kaiser Consultancy estimated in 2008 that the bioplastics market was
growing at 8–10% per annum, was worth over $1bn in 2007, and expected to reach
over $10bn a year by 2020. They also reported that there were over 500 bioplastics
processing companies in the world, a number that was expected to reach more than
5,000 by 2020.
A study by BCC Research estimated that the global market for biodegradable
polymers increased from 186,000 tonnes to 246,000 tonnes in 2007 (32% growth)
and is expected to reach 547,000 tonnes by 2012 (a CAGR of 17.3%). The sectors
within this market are defined as: compost bags (45% in 2007), loose filled
packaging (30%), other packaging (15%) and miscellaneous (10%).
According to Jim Lunt & Associates (a business consultancy specialising in plastics),
there are four applications have significant growth opportunities for bioplastics in the
immediate future:
 Compostable single use bags/films
 Fibres, degradable and non-degradable
 Plastic foam cushioning blocks
 Bioplastic moulded products, degradable and non-degradable
In December 2008, Plastics News reported that the market for bio polymer grew
from $1.93bn in 2002 to $2.85bn in 2007 and that it is expected to grow to $4.02bn
by 2012. Of the projected demand in 2012 approximately 24% is expected to be
starch based polymer.
Frost & Sullivan report that biopolymer demand rose from 50,000 tonnes in 2003 to
c.85,000 tonnes in 2007, of which c.35,000 tonnes were starch derived. They
estimate total demand for biopolymers growing to 390,000 tonnes by 2013, of which
150,000 tonnes will be starch derived.
To synthesise these various reports, it is clear that the market for bioplastics is
growing rapidly.
Market Drivers
The sustainability issues described above have in recent years come to the fore in
the public consciousness and driven corporates to adopt policies and programmes
aimed at improving sustainability. Although there is still a degree of "green washing"
the corporate response, particularly from retailers and consumer goods companies,
has largely evolved from a passive one only driven by compliance with regulations to
an active stance aimed at gaining competitive advantage. In many cases (e.g.
Walmart) companies have found that looking for sustainability improvements can
also be profitable economic measures.

[themoneymonster2] 05/7/2010 21:15

Polyhydroxyalkanoate (PHA)
PHA is a polyester produced by bacteria processing glucose or starch derived from
sugars or plant oils.
Polyamide 11 (PA 11)
PA 11 is a biopolymer derived from natural oil.
Bio-derived Polyethylene
The basic building block of polyethylene is ethylene which can be produced from
ethanol produced from the fermentation of agricultural feedstocks such as sugar or
corn i.e. bio-derived.
Synthetic Biodegradable
Synthetic biodegradable plastics are oil derived plastics that have additives in to
make them partially bio-degradable.
It is notable that in 2009 both the SPI, the plastics industry trade association in the
USA, formally came out in support of European Bioplastics position that claims that
"oxo-biodegradable" plastics were biodegradable were incorrect as the degradation
process in the case of oxo-biodegradable plastics was essentially one of
fragmentation, breaking down into small pieces that remain in the environment.
The characteristics of Plantic, PLA, PHA and synthetic biodegradable plastics are
summarised in Figure 6. The figure shows that Plantic's material has a number of
advantages over PLA, PHA and synthetic biodegradables.
Sustainability
As with most issues around sustainability, the realities around plastic use and
bioplastics in particular are more complex than the simple, "bioplastics are good,
conventional plastics are bad" views that some environmentalists would push. For
businesses and individuals considering how to make their operations and life more
sustainable it is necessary to consider the complete picture around any proposed
development.

Bioplastics have clear sustainability advantages in two main areas. Firstly
conventional plastics are derived from oil and there are increasing concerns about
the long-term supply of oil. Analysts vary in their estimates of when peak oil, the
point at which oil production rates peak, may occur but the consensus seems to be
in the 2010–2020 timeframe, a view reinforced by Fatih Birol, Chief Economist of the
International Energy Agency in August 2009. In addition to the oil peaking concerns
there is momentum, particularly in the USA, towards reducing dependence on
imported oil driven by energy security concerns. Although plastic feedstock only
accounts for 4% of oil use (plus an additional 3-4% used during manufacture) wider
use of bioplastics would contribute towards reduction of oil dependence.
The second sustainability factor is dealing with the end-of-life problem. Plastics are
long-lived substances and their disposal and dispersal into the environment is an
increasing concern. In the UK for instance, it is estimated by Waste Online that three
million tonnes of plastic waste are disposed of per year and that 56% of this is used
packaging. Plastic packaging makes up 7% of the average household waste by
weight and

[themoneymonster2] 05/7/2010 21:14

If an agreement is reached with the leading compounder it will, like the Klöckner
Pentaplast agreement, lead to both product sales and royalties.
Elements of Strategy
The agreements are components of a strategy that needs to be viewed in the
context of the structure of the plastics industry in which commodity resin producers
sell resin to compounders who add colours, stabilisers and polymer packages to
tailor the polymer characteristics to the requirements of the customer. Compounders
then supply converters who turn the polymer into products which can be either
injection or blow moulded, rigid sheets or films. The Klöckner Pentaplast agreement
links Plantic to a global leader in the rigid sheet market segment. An agreement with
a leading compounder would give access to a global market of converters.
Plantic's strategy is moving it away from being a manufacturing company with high
costs to becoming a royalty based licencing company with product development
R&D.
BIOPLASTICS
History
Bioplastics are not new. Parkesine, the first man-made polymer,was invented by
Alexander Parkes in 1856 and was synthesised from chloroform and castor oil. In
1941 Henry Ford unveiled a "soy bean" car with soy based plastic body panels. In
the last decade, however, we have seen increasing attention being focused on
bioplastics as sustainability issues have come to the fore.
Definitions
A bioplastic is a synthetic polymer derived from a renewable biomass source such
as pea starch, corn starch, potato starch, vegetable oil or even microbiota. This is in
contrast to a traditional plastic which is derived entirely from petroleum. To be
classified as a bioplastic the material must be organic and contain some percentage
of recently fixed (new) carbon found in biological resources or crops. This definition
is the basis of a US standard, ASTM D6866.
There is sometimes confusion between bioplastics and biodegradable plastics.
Biodegradable or compostable plastics are those which meet scientifically
recognised norms for biodegradability and compostability of plastics and plastic
products, independent of their carbon origin. Biodegradability means that the
material can be degraded by microbes under the right conditions. Non biodegradable
bioplastic are referred to as durable. The degree to which a product biodegrades
varies according to how stable the polymer is, the temperature, and how much
oxygen is available. In Europe the composting standard is EN 13432 and in the USA
ASTM D6400. To meet the ASTM and EN standards the material must 60%
biodegrade within 180 days in specified composting conditions and third party
certification is required.
Bioplastics and biodegradable plastics are not mutually exclusive.
Some petrochemical based plastics are termed biodegradable as their composition
has been altered to enable degradation. Traditional plastics such as polyethylene
are degraded slowly by ultraviolet light and oxygen and the manufacturers usually
add stabilising chemicals. Degradation agents are then added to the plastic in order
to achieve a controlled disintegration process. This plastic is known as degradable
plastic or oxy-degradable plastic or photodegradable plastic. These "oxo-plastics" go
through a disintegration process followed by a biodegradation. Manufacturers of
such plastics claim that their plastics will be broken down by microbes, however the
products do not meet the EN13432 composting standard and therefore cannot be
classified as biodegradable. They can, however, meet a safety and performance
standard, ASTM D6954-04.
Types of Bioplastics
Starch Based
Starch based bioplastics use starch as the basic polymer. Plantic's products are
derived from high amylose maize.
Polylactic Acid (PLA)
PLA is a transparent plastic obtained from the fermentation of cane sugar or
glucose.

[themoneymonster2] 05/7/2010 21:14

COMMERCIAL PROGRESS
Manufacturing Plants
Plantic's original manufacturing plant was in Melbourne, Australia. In November
2008 Plantic established its second manufacturing facility in Germany to serve the
European and North American markets. The plant has a thermoforming operation
which allows rapid prototyping, more efficient customer trials and increased
production capacity. In addition to Plantic products the plant can produce
conventional plastics.
In December 2009 the company announced an agreement with National Starch
which covers the relocation of the manufacturing of Plantic to the USA. The plant will
be co-located with the National Starch plant which will reduce total production costs
by an estimated 25%.
Commercial Agreements
A chronology of Plantic's commercial agreements is shown below.
DuPont
In September 2007 Plantic entered into an agreement with DuPont Packaging and
Industrial Polymers in the US for the global distribution of injection moulding resins
(excluding Australia and New Zealand). The nature of the agreement stated that
Dupont would also market Plantic's starch based sheet materials for trays and rigid
packaging applications in North America. Furthermore the relationship entailed a
collaborative development of new products which included cosmetics, personal care,
food packaging trays, caps and containers. Having announced the marketing
agreement in North America, this was extended to Japan in April 2008 and South
America in September 2008.
Dupont market Plantic's products under the DuPont Renewably Sourced Materials
initiative (part of DuPont's strategy to double revenues from non-depletable
resources to $8bn by 2015). More specifically, Plantic is marketed under the Biomax
family of products.
In June 2009 the company reported that sales under the DuPont agreement had
been slower than expected due to major business restructuring within DuPont but
that engagement had improved in H2 2009. Major stocking orders were completed in
early 2009 and the first customer sales of Plantic product were completed in the
USA.
In September 2009 Plantic announced that its material is being used by DuPont to
package BPA free baby bottles for the Weil Baby product line. Crucially, the inserts
for the bottles are fully compostable and dissolve in water, thereby increasing their
environmental credentials with the consumer.
On 15 February it was announced that Klöckner Pentaplast would replace DuPont
as distributer of Plantic's rigid film products in the Americas.
Bemis
In November 2007, Plantic announced an alliance with Bemis (NYSE BMS), a large
flexible packaging company with sales of c.$3.8bn. The partnership was designed to
machines lead to the co-development of new flexible packaging materials and
covered distribution in the Americas. Targeted applications include flexible
packaging for personal care and dry goods.
Major Film Producers
Plantic is also working with major film producers to develop new products.
In addition the company reports that:
 It has won a significant contract for supply from the German plant which will
initially be for conventional PET plastic but with opportunities to convert to
Plantic.
 Major trial orders have been received from a multi-national confectionary
company and this is expected to lead to commercial orders early in 2010.
 It had completed a one year trial with an international biscuit manufacturer for a
biscuit tray and had agreed a roll out plan for another 30 products
 The first orders from a South American confectionary company had been
received by DuPont.
 It had completed successful trial runs for global meat processing applications and
commissioned production tooling.
 It was progressing development of a film product with the brand owner.
Recent Strategy Developments
Klöckner Pentaplast
The agreement with Klöckner Pentaplast announced on 15th February replaces the
agreement with DuPont to distribute rigid packaging film in the Americas and the
company reports that DuPont is working with it and Klöckner Pentaplast to "assure a
smooth customer transition". The agreement also encompass the sales and
distribution of Plantic's biodegradable injection moulding resins, again taking over
from DuPont and a transition plan has been agreed with DuPont. The Plantic rigid
film products will be sold in the Americas as Pentafood Biofilm™ and Thermosplastic
Starch™ film.
Klöckner Pentaplast is according to its website, "one of the world's leading producers
of films for pharmaceutical, medical device, food electronics and general-purpose
thermoforming, as well as printing and speciality applications". The company has
sales of over $1.6bn and is based in Europe but has global presence, with capacity
of over 650,000 tonnes across 11 countries. Klöckner Pentaplast will distribute rigid
sheet using Plantic and will commence manufacturing trials of the product with the
intention of manufacturing under licence. Plantic is working with Klöckner Pentaplast
to prove that Plantic's rigid sheet can be produced on existing production lines. If, as
is expected, this is proven then global roll-out of Plantic manufacturing should be
straight forward as it would not involve significant capex for Klöckner Pentaplast. As
well as resin sales a royalty stream will be payable on end product sales of sheet
products. In the first stage Plantic will continue to serve the Australasian and
European rigid sheet markets directly but will continue to negotiate global coverage
with Klöckner Pentaplast.
ecoPlastic™
On 11 February Plantic announced that it is introducing a new product range,
ecoPlastic™. It is a range of compounded resins with low carbon content and high
renewable content based on Plantic's resin. Several customers in Australia and
Europe are reported to be testing the product. In addition Plantic has commenced an
evaluation programme with a leading compounder with a view to concluding an
agreement for ecoPlastic™ manufacturing and worldwide distribution. Plantic wil
form the platform on which they can build a suite of new renewable sourced
materials with unique performance properties. Another important point is that
specialised compounds based on ecoPlastic™ will be IP protected giving
manufacturers an advantage in the market.

[themoneymonster2] 05/7/2010 21:13

 Formed from non-GM corn starch, non toxic, renewable and sustainable
 Water dispersible
Marks and Spencer
In January 2007, Marks and Spencer launched an initiative termed "Plan A" (so
called because there is no Plan B). This £200m sustainability plan was designed to
have an impact on every aspect of the company's operations and in March 2010 the
company reiterated its commitment to sustainability. The original plan included such
aspects as becoming carbon neutral by 2012, extend sustainable sourcing, increase
ethical trading, send no waste to landfill, and help customers and employees
become healthier. Combined with a desire to reduce packaging by 25% by 2012,
Plantic offered a good solution. Further advantages for the company include:
 Biodegradable
 Home compostable
 Certified safe for disposal in soil (by AIB-VINCOTTE)
Contributors to the M&S/Plantic project include Stäger, Switzerland, who are
responsible for thermoforming the trays.
In June 2008, the Swiss Chocolate Assortment packaging was selected as one of
the winners of the 20th DuPont Awards for Packaging Innovation.
Competition
Frost & Sullivan identify six key players in the bioplastics market. Figure 4 sets out
the companies, their polymer source, existing markets, emerging markets,
ownership and market cap.

[themoneymonster2] 05/7/2010 21:12

One of the issues with bioplastics has been the ease of processing compared to
traditional oil derived materials. Plantic's strategy has always been to produce
material that is compatible with standard conversion technologies. Currently Plantic
can be readily converted on industry standard conversion equipment for
thermoformed and injection moulded products. Plantic has also trialed its barrier
resin in co-extruded blow moulding equipment and injection stretch blow moulding
machines, as well as its flexible film formulations on cast and blown film conversion
equipment. Forming of Plantic trays takes place on standard pressure forming
machines and vacuum/pressure forming machines with modified heating systems to
ensure that the heating step does not dry the sheet. In the basic conversion process,
sheet is heated on a thermal plate, formed into a mould with air pressure, cut,
ejected from the mould and then stripped from the web. The web is the material left
over after the trays have been stripped and is reground and fed back into the
extruder.
Plantic has demonstrated sheet production process up to 950mm wide on
conventional machinery and with lines running at 400kg/h, comparable to
conventional plastic sheet extrusion lines of the same width. The capital cost of a
Plantic extrusion line is in line with a PET sheet line of the same output.

Economics
The economics of manufacturing Plantic are driven by the cost of corn, the cost of
wet milling and extracting starch, and the cost of processing. The base corn is not
traded but sold on contract which gives greater price stability. National Starch own
the seed and contract grows the corn. The cost of the corn is driven by a 15% yield
difference compared to commodity corn and competition for land. The cost of starch
is driven by chemical modification costs, processing costs (energy and labour).
Plantic has a contract with National Starch that has a quarterly price adjustment
basis and an annual price adjustment for labour and energy costs.
New Technologies
The company is working on new technologies including; extrusion blow moulded
containers, dissolvable packaging and industrial films and has just launched
ecoPlastic™. The ecoPlastic™ resin will allow speciality resin manufacturers to
formulate IP protected resins with high renewable content to meet specific customer
functional requirements.
Product Case Studies
Cadbury Schweppes and the Plantic R1 Tray
Perhaps the most well know of Plantic's clients is Cadbury Schweppes. The
company has collaborated with Plantic since 2002 to incorporate biodegradable
technology into its packaging.
Plantic supplies thermoformed R1 trays for Dairy Milk Tray, Cadbury Eden chocolate
boxes and shelf ready packaging for the Cadbury Fun Filled Freddo.
For Cadbury's, Plantic's technology offers certain inherent advantages such as:
 Anti-Static
 Biodegradable
 Compostable to European standards (EN 13432)