Gordon Merchant’s bioplastics company Plantic Technologies is expecting a 500% increase in sales and hopes to turn a profit for the first time in nine years after securing a supply contract with Coles.
Plantic’s first deal with a supermarket will see Coles adopt the company’s bioplastic product, Plantic eco Plastic, for its fresh food packaging.
Merchant, an environmentalist and the founder of surf wear retailer Billabong, acquired Plantic in 2010. The company makes its eco plastic product using patented polymer technology based on the use of high-amylose corn starch derived from specialised non-genetically modified corn.
The product is designed to improve the carbon footprint of fresh food packaging.
Made from a plant, it uses up to 80% certified renewable material and has high barrier properties to enhance the storage of fresh food.
The product’s manufacture uses 25% less energy compared to conventional polymers, and requires no investment in new processing or packaging technology.
The deal with Coles was announced at the opening of Plantic’s new expanded manufacturing facility at its Altona, Melbourne headquarters yesterday.
Brendan Morris, chief executive of Plantic, told SmartCompany the deal was a “major milestone” for the company and signified a turnaround from Plantic’s $10 million loss last year.
“We have invested heavily in product development and research development,” says Morris.
“As a technology company there is a disproportionate spend of research and development in comparison to revenue and now we are crossing over that point where we are attracting interest.
“The global financial crisis in the middle of that period certainly did not help the development of the company.”
Morris says the eco plastic product is the “culmination of years of development work” and now Plantic is realising the commercial potential of the product.
He says Coles’ adoption validated the product.
“Our market segment is worth about $7 billion worldwide. It is a very attractive market and it is growing at two to three times gross domestic product as retailers look to deliver their product to the consumer in the best possible condition.
“The expansion of the plant really provides the capacity and platform to make a cost-competitive product that we can export. We have Plantic subsidiaries in Germany and the UK.”
Morris says Merchant’s investment and support has been key to the success of the business.
“Gordon was one of our original investors and he privatised the company. Being a private company and with Gordon’s support certainly helped us in the development of our technology. We really narrowed the focus of our company and focused on our core business,” he says.
The expanded plant in Altona, Melbourne was opened by Greg Combet, federal Minister for Industry and Innovation and Minister for Climate Change.
“Plantic Technologies was born out of a government-funded research project in 2000 which invited the clean technology industry to collaboratively find a solution to alternative food packaging,” Combet said.
Allister Watson, general manager of meat delicatessen and dairy at Coles, said the supermarket had been using Plantic eco Plastic trays on a number of lines across its pre-packed beef, veal, lamb and sausage products since late 2011.
“We expect that over 95 million eco Plastic trays will be bought by our customers in 2012,” Watson said.
Plantic claims that over the course of 12 months, the impact of Coles adopting the eco plastic trays will save over 13 million KwH of energy, the equivalent of powering over 2000 Australian homes.
It is also estimated to cut greenhouse gas emissions by five meta tonnes, which is equal to planting more than 750,000 trees.