NatureWorks Gets $350M Loan to Build PLA Manufacturing Plant in Thailand

RAPID

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NatureWorks makes a lot of the polylactic acid (PLA) plastic we consume with 3D printing. PLA is also used for packaging, medical nonwovens, interior decoration materials, and more. By not being based on oil, it’s a renewable alternative that could point to a more sustainable future. Now, NatureWorks has received a $350 million loan from Krungthai Bank PCL to build a PLA factory in Thailand.

NatureWorks already has a facility in Thailand, and Total Corbion, a direct competitor, has also built a factory there. This is not a coincidence; life cycle assessments point to Thailand being a good place to make PLA. The feedstocks are usually sugarcane but can also be cassava. In Thailand, most sugarcane farms are rain-irrigated, small, and located all over the country. The other main inputs in PLA are water and energy, which are in relatively good supply in Thailand.

The Thai government has been interested in PLA for years, funding research and creating tax incentives to promote investment in PLA and the use of the plastic. The government also has its own concept, Bio Circular Green, which marries sustainability and technology to create new industries. It also helps that NatureWorks, formerly a Cargill subsidiary, is now also owned by PTT, a Thai state-owned oil company.

The loan will be used to build and operate the plant, which will produce PLA granulate and fiber. It will convert lactic acid and lactide, all made at the same site, into all grades of NatureWorks’ portfolio. The plant will be located at the Nakhon Sawan Biocomplex in the Takhli district of the Nakhon Sawan province, north of Bangkok. The area is close to sugarcane fields. The annual production is estimated to be 75,000 tonnes, and the plant should be operational in 2025, with construction having started in February.

“This backing from Krungthai Bank not only validates our strategic global positioning within Thailand and the Asia Pacific region but propels us toward continued expansion to support the worldwide bioeconomy. The funding will enable us to expand our international customer access to fully biobased, low-carbon biomaterials that feature unique performance attributes valued by global downstream packaging and fiber markets,” said NatureWorks CEO Erik Ripple.

“Thailand is a regional and global leader in driving the development of a global bioeconomy, and commercial banks play a crucial role in driving this transition, We’ve provided NatureWorks with the financing because it is a world leader in manufacturing biomaterials, meets the requirements to drive our country’s BCG model forward, and aligns with our commitments to address climate change and facilitate the transition to a circular economy. NatureWorks is also creating additional high-value downstream opportunities for existing sugarcane farmers in the Nakhon Sawan region,” said Suratun Kongton, Chief Wholesale Banking Officer at Krungthai Bank.

“This investment is monumental for NatureWorks, Cargill, and GC as it moves our joint commitment to environmentally friendly bio-chemicals and biomaterials forward at a time where global demand is increasing. With this infusion of financial support from Krungthai Bank for NatureWorks’ new PLA manufacturing facility, NatureWorks will continue to be competitive in the biomaterials market, pioneering new frontiers for bioplastic applications and advancing biobased solutions with sufficient capacity to capture customer needs across the growing Asia Pacific bioeconomy,” stated Narongsak Jivakanun, CEO of PTT GC.

As far as industrial policy goes, the stimulation of biopolymers on top of a farming industry is not a bad idea at all. This should really benefit local farmers in the area. It could also make PLA very cost-competitive for Thai markets locally, which could help the company reduce its reliance on fossil fuels. PLA is used as a medical fiber in surgery, could be used in coffee capsules at scale, and could be used as a fiber alternative in many applications. There could potentially be a lot of growth if more companies and consumers become concerned about their environmental impact.

This kind of stimulus seems much more logical than trying to establish a car factory in an unsuitable location. Many Thai companies, on a small or large scale, could already use PLA products today, and many injection molding and other firms could process them into sophisticated and high-volume items. This is a great initiative, and hopefully, Thailand will continue to invest in making bioplastics a reality.

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