A second chance for Cereplast and Metabolix
6. August 2014
On July 20, bioplastic service ware manufacturer Trellis Earth Products announced it would soon begin operation at Cereplast’s former Seymour, Ind., production site. Trellis, which is based in Wilsonville, Ore., acquired the assets of Cereplast including production equipment, patents, inventory and trademarks as part of that company’s Chapter 7 liquidation proceedings.
On August 4, Metabolix announced an injection of capital. According to the company, $25 million of its securities were sold to “Jack W. Schuler, Oracle Investment Management, Inc., Birchview Capital, certain members of the Company's Board of Directors and executive management team, and other investors.”
The company, which grew out of research at MIT, is seeking to gain its footing after the February 2012 decision by its former owner, Archer Daniels Midland, to end its commercial alliance with the company.
The overall market continues to develop, with global demand for biobased and biodegradable plastics forecast to rise 19 percent per year to 950,000 metric tons in 2017, but apart from companies like Natureworks and Braskem, which have already made significant investments in production capacity, smaller players, despite the novelty of their technologies, face an uphill battle.
I visited Cereplast at its original production plant in Southern California, and the company took tremendous strides since then, but the pressure to produce as publicly traded company (which Metabolix also must deal with), has to be exceptionally difficult for a material start up. Metabolix always generated buzz at SPE's annual GPEC conference, but buzz doesn't always translate to revenue. The injection of cash upon becoming a public company is good, and necessary in many cases, but the day-to-day performance pressure is not.