Bid for first Asian polylactic acid plant

A recently approved incentive package for the bioplastics industry will help Thailand attract investment of at least 10 billion baht to establish Asia’s first polylactic acid (PLA) plant within five years, says the Plastic Industry Club.

The package, expected to take effect this year, aims to strengthen Thailand’s attractiveness to investors and lure international firms.

The large PLA project, with annual production capacity of 200,000 tonnes, will add value to the country’s exports of petroleum-based plastics now totalling 153 billion baht, said club chairman Veerasak Kositpaisal.

The Joint Public-Private Consultative Committee last month agreed on 15-year tax privileges for bioplastics investments, compared with the normal eight-year tax holiday granted by the Board of Investment.

The Science and Technology Ministry was assigned to work with other agencies to study the PLA project in detail and resubmit the plan within two months for further consideration, said Mr Veerasak, who is also president and chief executive of PTT Chemical. He said Thailand faced fierce competition from neighbouring countries to attract such investment.

Malaysia in particular has offered grants for bioplastics projects as it aims to become a regional leader in agro-industries. It also has an abundant supply of bioplastics raw materials led by palm oil.

“Bioplastics investment has entailed high risks, especially high production costs, while the market is still limited but with high growth prospects, with global demand rising by 30% annually,” said Mr Veerasak. Of the 100 million tonnes of plastic consumption globally, only 0.5% or 500,000 tonnes is in the form of bioplastics, he said.

Thailand, meanwhile, is among the world’s leaders in terms of petroleum-based plastics, with more than 3,000 companies in operation. The industry generates revenue of 370 billion baht, of which products worth 152.9 billion baht are shipped abroad, amounting to 3% of Thai exports. The kingdom also has a large availability of cassava, a raw material for bioplastics, with yearly output of nearly 30 million tonnes and the potential to double yield per rai, said Mr Veerasak.

His comments followed a recent statement by the US producer NatureWorks LLC, the world’s leading bioplastics company, that it aims to decide by year-end on a site for a $400-million PLA plant. Thailand, Malaysia and Singapore are listed among potential locations for the project, which is expected to come on stream in 2014 as the second plant of its kind in the world after NatureWorks’ plant in Nebraska.

PTT Plc, the country’s largest petroleum conglomerate, has been in talks with potential strategic partners, including NatureWorks and Japan’s Mitsubishi Chemical, for its bioplastics project.