The PLA Market

In the 2008 NNFCC Study, EU demand for PLA was projected to grow to 650 ktpa (thousands of tons per annum) by 2025, with an excellent opportunity for a UK plant to capture 20% of this market. Detailed discussions with key customers confirmed significant interest in second generation (G2) Poly Lactic Acid (PLA) as a rigid renewable polymer with the functionality required, that would be available in commercial quantities from an EU (non-GM) source.

As a bio-renewable plastic with the properties required to replace conventional plastics in target applications, G2 PLA is expected to sell at a significant premium to first generation PLA and conventional oil based plastics.

The technology Nuplas is licensing provides a unique advantage over the competition as it enables production of G2 PLA polymer which has the functionality required to be a viable bio-renewable competitor, and replace conventional plastics derived from petroleum. G2 PLA will have superior performance at typical service temperatures in these applications, compared to G1 PLA. As a bio-renewable plastic with the functionality required, it is expected to sell at a significant premium to G1 PLA and conventional plastics.

A March 2010 study by McKinsey & Company showed global market potential for 3,000 ktpa PLA in 2020, including 1,100 ktpa fibre. This is consistent with the estimate in the 2008 Study of 650 ktpa total EU demand by 2025, which included only modest volumes of specialty fibre.

Detailed discussions with key customers confirm significant interest in G2 PLA as a rigid renewable polymer with the functionality required, that would be available in commercial quantities from an EU (non-GM) source.

Marketing strategies for G2 PLA in packaging and fibres were developed in consultation with key customers and other stakeholders. The proposed approach is consistent with high level packaging strategies, including designing out waste, the cradle to cradle concept, resource efficiency, and dematerialisation, which have the objective to improve sustainability by decoupling the growing use of packaging from the unacceptable costs of environmental and social degradation.

The Company will target high value applications where the best end-of-life option is energy recovery (if recycling is not feasible). Under this umbrella, Nuplas proposes to follow a niche marketing strategy for high value G2 PLA products based on developing its own IP in target segments. The combination of renewability and improved properties of G2 PLA will drive its use in rigid packaging for fresh produce and short shelf life products. In durable mouldings and fibres, target applications have been identified in which G2 PLA’s renewability and functionality have high value.

Nuplas believes that its strategy of working closely with key customers to develop G2 PLA products which enable them to provide solutions to growing demands from the marketplace for renewable flexible and rigid packaging, durable goods, carpet and textiles, will be successful in taking G2 PLA to market.