Green Technology Forum

As part of their quest to market environmentally-friendly plastics, Cambridge, Mass.-based Metabolix Inc. is developing a way to help cut fossil fuels out of the plastics-making process by creating a strain of plants that actually grow plastic polymer inside.

Making plastics out of plant starch instead of the conventional way using petroleum is nothing new. What’s grabbing analysts’ attention is the idea of actually growing plastic polymer in plants.

Switchgrass plants.

“This is a company that has market-disruptive technology,” said Pamela Bassett, a Cantor Fitzgerald analyst covering the industrial-biotechnology sector. “They have tremendous upside potential. They could be leaders on the ground floor of an entirely new industry.”

Although plastic-making plants are still a few years away from commercialization, Metabolix has already grown test batches of plastic-producing tobacco, switch grass and sugarcane plants. If successful, the company will cash in on its vision of mundane acres of weeds as plastics factories in the fields.

Metabolix’s goal in pursuing “plastic” plants is to make it cheaper and easier to produce its flagship bio-based product, a polymer called PHA. An added bonus, the company says, is that refuse material from the plants can be harnessed as a source of ethanol production.

100% biodegradable

The “plastic plant” technology is part of Metabolix’s two-pronged strategy of marketing non-petroleum based plastics that aren’t harmful for the environment.

Earlier this year, Metabolix grabbed headlines by rolling out a line of 100% biodegradable plastics created from corn. The plastics will be marketed under the Mirel brand name through a joint venture called Telles with agricultural giant Archer Daniels

Mirel is being first pitched to the plastics-disposables industry. The company is positioning the product as a film coating for the inside of the paper cups commonly used in the fast-food industry, plastic bags for food storage, and some agricultural products.

Its future will hinge on the strength of the public’s demand for environmentally-friendly products and business’ perceived need to lessen its carbon-dioxide impact.

“We know the product works and there’s interest in the concept,” said Laurence Alexander, an industrial biotechnology analyst for Jefferies & Co. “Now it becomes a matter of how much are consumers willing to pay for it. Compostable plastics have been around for years, for example, and in most cases have had to be priced competitively before consumers pay attention their green qualities.”

Indeed, Mirel is being marketed as a “feel-good” product for both consumers and makers of disposables. Metabolix and ADM are both betting that consumers will pay a little extra to buy a product that they know won’t hurt the environment and is made with little fossil fuel.

“We’re targeting disposables,” Chief Executive Jay Kouba said in an interview. “That’s the place where a renewable, recyclable product actually has the most value.”

In July, for example, Metabolix signed a deal to provide bio-plastic gift cards for Target Corp. that will bear the Mirel logo. It comes with a brief explanation that the card is biodegradable. Seeking out such high-profile partners, says Kouba, is crucial as the company hopes to promote its product through co-branding, imitating the success DuPont had with Teflon.

So far, analysts say Metabolix seems to be on the right track.

“Consumer-oriented product companies will gravitate towards that — they want to say they’re green,” said Michael Carboy, an industrial biotech analyst for Signal Hill Group.

Metabolix went public in November 2006 at $14 a share. Today it’s trading above $26 and sports a market value of $578 million.

According to Jefferies & Co., the production of plastics accounts for about 5% of all fossil-fuel consumption. Less than 10% of plastics end up being recycled.

Meanwhile, the vast majority of traditional plastics are made with oil and other fossil fuels. According to the Biotechnology Industry Organization, the U.S. consumes about 7.5 billion barrels of oil a year, and about 254 million barrels of it goes into plastics and chemical production. Natural gas is also used to make some types of plastics.

source: MarketWatch

This entry was posted on Wednesday, December 19th, 2007 at 7:42 am and is filed under Biotechnology, Energy, Environment, Food & Agriculture, Materials, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.