Nuplas will produce commercial quantities of second generation (G2) Poly Lactic Acid (PLA) to meet growing demand for bio-renewable content in packaging film, rigid packaging, durable injection mouldings and fibre for carpet, textiles and non-wovens. As a bio-renewable plastic with the properties required to replace oil-based plastics in target markets, G2 PLA is expected to sell at a significant premium to first generation (G1) PLA and conventional oil based plastics such as PET.
The Company will use a tested, workable and fully functional technology which provides a unique advantage over the competition as it enables production of PLA which has superior performance at typical service temperatures in these applications. This competitive advantage versus other PLA technologies is expected to continue for at least the next 10 to 15 years.
It is anticipated that with PLA market growth and high capacity utilisation of the first plant, there would be the opportunity to expand and profitably grow this business in future years.
If the plant were to be expanded, there would be opportunities to reduce feedstock cost and carbon footprint by backward integration into production of lactide and lactic acid, and to increase PLA capacity further.
The longer term vision is for an integrated complex producing bio-renewable polymers based on lactic acid and other platform chemicals derived from feed wheat and other crops and crop by-products.
By building the lactic acid plant on a site adjacent to a starch plant or bioethanol plant, the Company has the potential to enhance the neighbouring plant’s business in the long term. The benefits would include shared supply chains for feed wheat feedstock and animal feed coproducts, and there is potential for other synergies going forward.