Biodegradable Plastics – Are Costly Green Products Still Relevant During an Economic Crisis-Mar09

8/14/2019 Biodegradable Plastics Are Costly Green Products Still Relevant During an Economic Crisis-Mar09

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Biodegradable Plastics Are CostlyGreen Products Still Relevant During

an Economic Crisis?

W.F. Kee

Research AnalystTechnical InsightsMarch 10, 2009


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Focus Points

Impact of Economic Crisis

Global Biodegradable Plastics Market

Industry Survey on Environmental Issues

Key Drivers for Growth

Existing and Emerging Applications

Strategic Recommendations


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Impact of Crisis on the Global Chemicals andMaterials Market

JapanAutomotive giants are hit hard byeconomic recession andresulting drop in global demand;this directly affects all dependentchemicals and materials markets

JapanAutomotive giants are hit hard byeconomic recession andresulting drop in global demand;this directly affects all dependentchemicals and materials markets

USA

Housing market collapse affected a wide range ofchemicals and materials markets

Significant job losses in the industry and plantclosures (Dow, BASF, Rohm & Haas and others)

Decline in consumer demand affects end-marketpricing, which in turn led to volume reduction

USA

Housing market collapse affected a wide range ofchemicals and materials markets

Significant job losses in the industry and plantclosures (Dow, BASF, Rohm & Haas and others)

Decline in consumer demand affects end-marketpricing, which in turn led to volume reduction

Europe

Decline in consumer demand resulted inscaling-down of production and redundanciesacross all industries.

Construction. automotive and real estateindustries and the finance and bankingsectors have already been hit, affecting thechemicals and materials markets

Europe

Decline in consumer demand resulted inscaling-down of production and redundanciesacross all industries.

Construction. automotive and real estateindustries and the finance and banking

sectors have already been hit, affecting thechemicals and materials markets

RussiaRussia is affected by theeconomic downturn but its

strong position in oil and gasreserves suggest a quickcomeback

RussiaRussia is affected by theeconomic downturn but itsstrong position in oil and gas

reserves suggest a quickcomeback


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Global Response: Massive Government Stimulus

China Interest rate cuts $586bn stimulus (infrastructure, rural)India

Interest rate cuts $4bn stimulus package (infrastructure,exports, textiles)

Global Response Governments infusing capital into financial institutions Globally coordinated interest rate cuts IMF (International Monetary Fund) offers bridge loan to meet foreign exchange requirements Discussions, coordinated efforts (G20 summit)

Brazil Infrastructure development under PDP

(more than $64bn into countrys financialsystem)

USA $787bn American Recovery

and Reinvestment Bill $700bn bailout rapid interest

rate cuts $23bn support for top three

auto companies; Plan to create 2.5 millionjobs by 2011

UK: 250bn bailoutGermany: $700bn relief packageBelgium and Switzerland: Capital infusionECB: Interest rate cuts

France: $50bn stimulus package

Japan: Interest rate cuts 447bn yen stimulus

package

South Korea: Interest rate cuts and

efforts to keepcurrency stable

$11bn stimuluspackage

Russia Support for Russian

ruble $20bn stimulus package


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What Will Catalyze the Turnaround forChemicals and Materials?

Green Chemicals and Materials Biodegradable products, sustainably sourcedchemicals, bioenabling chemicals and materials will drive growth in marketsegments from solar cell chemicals to bioplastics and from detergents to next

generation biofuels

Renewable Sourcing and Feedstock The sourcing and utilization of renewablechemicals and materials can provide a competitive advantage to companiesthat suffer from price fluctuations in traditional feedstock

In spite of fiscal challenges, credit crunch and contraction of consumer markets, there are still anumber of drivers creating growth opportunities in the global chemicals and materials markets.

Green Chemicals & Materials

Renewable Sourcing & Feedstock

Logistics and Supply Chain Acquisitions

E-commerce Geographic Regions


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Investment in Green Policies / Strategies

Q: Over the next year, my companys rate of investment in green policies/strategies will?

Rate of Green Investment

(N=593)

67%

33%

0%

0% 20% 40% 60% 80%

Decrease

Remain Unchanged

Increase


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Drivers for Environmental Investment

Q: There are many drivers which contribute to a company making environmental investments, what are the main reasons drivingyour decision to go green?

Drivers of Going Green

(N=400)

33%

38%

46%

50%

54%

59%

62%

69%

67%

61%

0% 20% 40% 60% 80%

Potential competitive advantage

Growth opportunity for company

Corporate social responsibility

Meeting customer expectations/requirements

New technology opportunities

Ability to enter new markets

Greener Image

Product development

Potential cost savings

Leverage existing markets

61%

Note: Multiple mention question. Only top ten responses shown.


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Poll 1

Q1: In this economic downturn, do you think we should

continue to invest in green technologies even if thetechnology is more expensive?

A. YesB. No

Please respond A or B on the textbox of your screen.


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Key Drivers for the Biodegradable Plastics Industry

HighHighMediumImprovements in R&D impact ofbiotechnology

MediumMediumLowEco-labeling

HighHighMediumIncreased demand from educated

consumers

HighHighHighDrive for less dependence on oil

HighHighHighGreen procurement policies

HighHighHighRegulations EU, Japan

HighHighHighTrend of going green

HighHighHighClimate change

8-12 years4-7 years1-3 yearsDriver


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Global Volume Forecast by Polymer Type

Global Volume Forecast by Polymer Type (2003 - 2013)

0

50

100

150

200

250

300

350

400

450

2003 2007 2010 2013

Year

Volum

e(kt)

Others

PHAStarch-based

PLA


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Volume Share by Polymer Type

2003

63.9%

27.3%

0.8%

8.0%

PLA Star ch PHA Other

2010

43.3%

39.8%

11.2%

5.7%

PLA Star ch PHA Other

2013

38.6%

38.2%

18.6%

4.7%

PLA Starch PHA Other

2007

51.8%39.4%

1.4%

7.4%

PLA Starch PHA Other


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Existing and Emerging Application Sectors

Existing andExisting and

EmergingEmerging

ApplicationsApplications

Agriculture -mulching film

Compostable Waste /Carrier Bags

Healthcare

Automotive

Electronics

Film and Rigid

Packaging

Toys

Existing Application Sectors Emerging Application Sectors

Catering Products


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Key Players

Metabolix

Natureworks

Cereplast

Plantic

Rodenburg

Novamont

Player

Apparel, furnishings, carpets,plastic cards

Fiber and nonwovens, films,water bottles, catering products

PLA

Consumer goods - cosmeticpackaging, razors, brushes,applicators, cell phones, pens andoffice supplies

Disposable cutlery, agriculturalfilm

PHA

Hybrid resins for automotive,consumer electronics, toys,cosmetic packaging

Injection molding, thermoforming,extrusion coating and blowmolding applications

Starch / PLAblend

Water flushable applications water dispersible labels, health &

hygiene

Rigid packaging, injectionmolding, flexible films, barrier

resins

Starch

Plastic replacement, automotive,electronic packaging

Flower pots, agricultural filmsStarch

Injection molding, foams,thermoforming, extrusion, tire

additive

Packaging film, agriculturalapplications, waste and shopping

bags, catering

Starch

Emerging MarketsExisting MarketsPolymer

Type


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Application Roadmap

Present 20252015 2020

TIMELINE

Application

Rigid and flexible plastic replacement

Toys

Electronic Applications

Automotive components

Medical Applications


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Poll 2

Q2: What application sectors would you like to have the option ofusing biodegradable plastics? (may choose more than one)

A. Food packaging

B. Carrier / waste bags

C. Disposable cutlery

D. TextilesE. Toys

F. Electronic casings

G. Others

Please respond A/B/C/D/E/F or G on the textbox of your screen.


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Strategic Recommendations

Challenges Recommendations Implementation

CostCompetitiveness

Improve upon processing economicsDevelop more efficient technologies

Monitor new technological developments,

especially biotechnology

Seek cheaper feedstock

Integrated processProcess optimization

Genetically modified bacterial

strains

Improvement ofProperties

Develop new and better technologiesImprove blending prospects

Reinforcement using natural fibersConsider incorporating nanotechnology

Structural modification of polymersCross linkage

Development of biocomposites ornanocomposites

IndecisionRegarding

Positioning ofProducts

Develop products that can act as drop-inreplacements

Introduce innovative products that open newmarkets

Sustainability as a branding tool

Investigate emerging markets

Environmental,Health and

Safety Issues

Carbon footprint assessmentProper disposal guidelines

Cradle to cradle conceptEnsure proper ESH testing

Closed loop processLife cycle analysis, or similar

Low energyEfficient green processes


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Your Feedback is Important to Us

Growth Forecasts?

Competitive Structure?

Emerging Trends?

Strategic Recommendations?

Other?

Please inform us by taking our survey.

What would you like to see from Frost & Sullivan?


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For Additional Information

Steve LeeStrategic Account Manager

Chemicals, Materials and Food, Asia Pacific(65) 6890 [email protected]

Documents

Biodegradable Plastics – Are Costly Green Products Still Relevant During an Economic Crisis-Mar09