Thailand’s leading chemicals’ producer is pushing ahead with a major “bioplastic industrial estate” although NatureWorks, which would build the plastics plant, is still not yet on board.
PTT Global Chemical (PTTGC), announced to Asian investors that it will spend $143 million to establish a 50:50 joint venture with a Thai sugar producer to set up “a one-stop place from growing sugarcane, producing sugar, making ethanol, generating electricity from biomass-based power plants and setting up a bioplastic manufacturing plant.”
“If we can make this bioplastic hub happen, I am sure that NatureWorks (the world’s largest biopolymer producer) will choose to set up a $200-million worth polylactic acid (PLA) manufacturing plant in Thailand,” said PTTGC’s president and chief executive Supatanapong Punmeechaow. The JV deal is expected to be finalized by the end of the year. Then it would take another 30 months to bring the complex online.
Meanwhile, NatureWorks is bargaining for financial incentives from the Thai government before proceeding with the world-scale PLA plant.
Spokesman Steve Davies told My Purchasing Center: “NatureWorks is wrapping up the front-end engineering design work for the Thai facility with Jacobs Engineering, and our focus now shifts to finalizing negotiations with Thailand’s Finance Ministry on incentive structures for the significant investment required in a second production facility.”
Punmeechaow told Asian investors that a decision on construction of the PLA plant may not come until the fall of 2016. The delay may be partly due to the failure of demand for PLA to expand as rapidly as overly optimistic projections from market research groups.
Another major player, Corbion Purac, also seems to be dragging its feet on proceeding with a planned industrial-scale PLA plant in Thailand, possibly waiting to see what types of incentives are granted to NatureWorks and its equity partner PTT.