In order to manage, first measure. An accurate valuation of your business is critical to successful management.

In order to manage, first measure. An accurate valuation of your business is critical to successful management.

Real estate is often the most valuable asset on the balance sheet. When was the last time you had it reliably valued?

Real estate is often the most valuable asset on the balance sheet. When was the last time you had it reliably valued?

Often overlooked but always critical. Typically machinery & equipment is only considered for managing depreciation.

Often overlooked but always critical. Typically machinery & equipment is only considered for managing depreciation.

Bioplastics set for significant growth through 2018

Bioplastics, also called biobased plastic or biodegradable plastic, are a type of plastic manufactured from renewable biomass feedstocks such as vegetable oils, corn starch or sugar. The bioplastics industry is still a niche market and in its emerging growth stage though bioplastics have been utilized in a number of commercial markets and applications, such as packaging, textiles, agriculture, automobile, building, and electronics. European Bioplastics forecasted global bioplastics production capacity to quadruple by 2018 (6.73 million metric tons) as compared to 2013, with 75.8% being produced in Asia. According to Freedonia Group, global bioplastics demand is expected to rise by an annually growth rate of 19% until 2017 to reach 960,000 metric tons.​The global bioplastics market is currently valued at USD3.94b, and accounts for 1% of the global plastics market. The market is segmented by material type as bio-PET, bio-PE, bio-PA, bio-degradable polyesters, PLA & PLA blends, starch blends, PHA and others. Bio-PET accounts for around 80% of the current market, and is anticipated to be the fastest growing segment, with a 31.4% CAGR between 2014 and 2020, and is expected to contribute USD29.1bn revenue to the bioplastics market by 2020.

Price is primary determinant for the success of bioplastics

Analyst Kent Furst opined that price and performance (such as strength and durability) are ultimately factors for the success of bioplastics. Large scale conversion to bioplastics will occur only once the price of bioplastics reaches parity with conventional plastics (petroleum –based). Currently, bioplastics prices are usually at least twice the price of conventional plastics. Significantly higher production cost, in comparison to plastics produced from petroleum-derived feedstock, is one of the causes for the existing low market penetration rate of bioplastics. Price reductions may be achieved by new production technology which can reduce production costs as well as improve performance. Market penetration and demand growth is closely connected to the relative prices for conventional polymers. Bioplastics experts estimate that most bioplastics products would achieve price parity with petroleum-based plastics if petroleum prices sustains at around USD90 per barrel. Another key factor to make bioplastics prices competitive is the availability and price of feedstock which assures long term supply of raw material to support large scale production and low cost production. Raw materials for bioplastics production are renewable and only account for a tiny part of cultivation capacity. However, in consideration of the fact that first generation feedstocks, such as sugar, corn starch or plant oil compete with food and feed usages, scientists have introduced the use of second generation feedstock, lignocelluloses, obtained from wood and short rotation coppice.

Growing demand for environment-friendly packaging

Research and Markets.com (2013) reported that the bioplastics packaging segment will grow at a 19.85% CAGR between 2013 and 2018.One of the key factors contributing to this growth is the growing concern for environment-friendly packaging. Life cycle analysis demonstrates that bioplastics cause less carbon dioxide emissions than conventional plastics by 30%-70%. Hazardous waste can be reduced significantly by using bioplastics instead of petroleum-based plastics. Bioplastics are becoming more popular in commercial and industrial sectors as a result of governments around the world demanding cleaner alternatives to petroleum based technologies and the problem of carbon dioxide emissions, a major cause of the greenhouse effect. On a metric ton basis, bioplastics generates between 0.8 and 3.2 fewer metric tons of carbon dioxide as compared to petroleum-based plastics. The current major uses of bioplastics are packaging and food service non-durable applications, mostly designed for one-time use. There is very little difference in performance between bioplastics and petroleum-based plastics. For example, process temperature is significantly lower and the shelf life is higher. Some large global companies have started using bioplastics for packaging. For example Coca Cola has produced more than 35 billion 'Plantbottles', which are 30% plant based and use sugarcane as feedstock, for water, sparkling, juice and tea distribution in 38 countries. Other famous brands including Danone, PepsiCo, Heinz, Tetra Pak and L'Occitane have also launched or integrated bioplastics products. Bioplastics market penetration is expected to speed up with the push of reputable brands.