Small California Town Outlaws Takeout PS

Another California city has banned the use of polystyrene takeout packaging.

Mill Valley — a town of nearly 15,000 in Marin County that lies just north of San Francisco across the Golden Gate Bridge — approved a ban Aug. 3 that will go into effect Nov. 2.

The city becomes the 24th California town to ban the use of PS takeout food packaging. There also is one countywide ban in Santa Cruz, and Marin County is expected to enact a countywide PS ban later this year.

In addition, four California cities and one California county prohibit the use of PS packaging at municipal facilities.

The Mill Valley ban applies to containers, bowls, plates, trays, cartons, cups, forks, knives, spoons, straws, lids, bags, sacks, wrappings and other items designed for one-time use to transport or store prepared or takeout food.

It applies to all restaurants and retail food vendors and also applies to packaging for food that is left over from partially consumed meals prepared at restaurants or any other retail food vendor.

The new law also encourages city facilities and organizations or individuals renting city facilities to use durable food-service items. If that is not a feasible option, such groups or individuals are “required to use biodegradable disposable food packaging” rather than non-biodegradable disposable food packaging, unless the biodegradable option costs 15 percent more than the non-biodegradable option.

Mill Valley defined biodegradable disposable food packaging as uncoated paper and cardboard, paper and cardboard that meet ASTM International standards for biodegradable coatings and liners, and bioplastics that meet ASTM standards for bioplastics.

The law also said that any bioplastics should be “clearly labeled, preferably with a color symbol” so people who collect and process bioplastics “can easily distinguish the ASTM standard compostable bioplastic from non-degradable plastic.”

Polystyrene ice chests and coolers were excluded from the ban.

Fewer than 5 percent of the cities in California have bans on PS takeout packaging and most of them are coastal communities.

Copyright 2009 Crain Communications Inc. All Rights Reserved.

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California Recycler Eco2 Closes Riverbank Plant

Eco2 Plastics Inc. has shuttered its PET recycling plant in Riverbank, Calif., and appears to be running out of time to prove that its water-free recycling process for PET will work.

The financially troubled company laid off 47 of its 58 employees and began dismantling equipment at the plant Sept. 8. Formed in 2000, Eco2 has spent the past five years trying to perfect its process to make it commercially successful.

In papers filed with the Securities and Exchange Commission Sept. 8, the San Francisco-based company now says that it will regroup and hopes to build and open a new plant, most likely in northern California, in the next 6-9 months.

Peninsula Packaging Co. — Eco2’s largest customer, shareholder and investor and a manufacturer of PET thermoformed food packaging containers made with as much as 70 percent recycled content — is headquartered in the northern California town of Exeter in Tulare County. Peninsula accounts for roughly 60 percent of Eco2’s sales.

In its SEC filing, Eco2 conceded that it could have to switch to a conventional water-based process to survive, that it may need to cease operations, and that it needs at least $9 million to build and open another plant — $4 million of which must be raised, they said, “from equity or debt investors, including the company’s principal shareholders.”

Eco2 also said that it will purchase a commercial wash line for the plant and believes that it can adapt a line of that type to use its bio-solvent based cleaning process. But it also said the possibility exists that Eco2 may need to recycle PET conventionally to succeed.

“In the event that the company is unable to achieve expected results from the bio-solvent-based line in the new facility, the new facility should permit the company to switch successfully to a water-based process [as it will have] equipment that has been proven to operate efficiently in a water-based process,” said the company in its SEC filing.

Eco2 had hoped to begin commercial-scale production of recycled PET flake this past June, but the company said that it “had not been able to improve its processes” enough to do that.

The company has “not demonstrated, as yet, the ability to produce product in sufficient volumes, at consistently high quality and at sufficiently low cost for profitable and sustained operations,” despite improvements to drying technologies, improvements that optimized the performance of the bio-solvent and the installation of additional vapor recovery equipment to reduce to bio-solvent evaporation, said the company in its SEC filing.

“The company’s difficulty in achieving sufficient volumes of production has consumed significant capital, with $42 million in capital raised since 2006” alone in an effort to achieve commercial viability, said the company’s SEC filing.

Those realities led Eco2’s board to conclude that the Riverbank plant was “no longer suitable” if the company was to achieve “an efficient flow” to the recycling process, said the filing.

Still, Eco2 said it believes that the planned new facility, by incorporating a new wash line and all the process improvements made to date, “will operate successfully” and be able to produce 100,000 pounds of recycled PET flake daily. “But there can be no assurances” of that, it added.

“The company still has not perfected the overall processes required to produce recycled plastic flake in sufficient volumes, of sufficient quality, and at sufficiently low production cots to support sustained profitable operations,” said the company in its SEC filing. “If the company is not able to improve its processes to achieve such goal, the company will need to cease operations or potentially switch to a water-based process. The potential ability to switch to a water-based process reduces the risk associated with the investment in the new plant.”

Last November, Eco2 laid off 85 of its 120 workers and shut down its batch processing line in order to switch over to its next-generation, continuous-flow, water-free PET washing process. In springtime, it had slowly begun to recall some workers, but couldn’t lower the cost of its operations sufficiently. It had hoped to produce food-grade recycled PET at a rate of 40 million pounds annually.

In the first six months of 2009, Eco2 lost $10.8 million on $1.6 million in revenue, bringing its losses in the past 5½ years to nearly $115.5 million. Eco2 received investments in excess of $15 million from Trident Capital Management and Peninsula Packaging in 2008, and raised another $2 million in funding from existing investors this year.

As of June 30, the company had cash and cash equivalents of $243,000, compared to $1.6 million in cash and cash equivalents at the end of 2008.

Eco2’s water-free technology immerses shredded PET bottles in ethyl lactate, a biodegradable solvent made from beets and corn and then blasts the material with liquid carbon dioxide to remove the solvent. The solvent and liquid CO2 are reused.

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Bimbo introduces Oxo-biodegradable Snack Packaging

MEXICO CITY — Multinational baking giant Grupo Bimbo SAB de CV of Mexico City has unveiled what it claims are the world’s first oxo-biodegradable metalized polypropylene snack bags.

The packaging uses additives developed by Symphony Environmental Technologies plc of Borehamwood, England.

The bags’ metal coating is aluminum, which keeps the contents fresh. The packages degrade between three and five years after the end of a product’s predetermined useful life span, Symphony CEO Michael Laurier said May 12.

“Bimbo is a partnership deal,” Laurier said. “They have been working with us to change all their packaging to d2w.”

Bimbo, which produces 5,000 products in 18 countries and owns 150 brands, had net sales of $7.4 billion in 2008.

For now, Bimbo’s Organización Barcel snack food subsidiary is using Symphony’s d2w additive in packaging for two products, Takis and Ricolino, which are sold in Mexico.

Laurier said Barcel plans to change all of its packaging to oxo-biodegradable. According to Daniel Servitje Montull, Bimbo’s managing director, Barcel’s re-packaging program will take until the end of 2010 to complete.

Gabino Gómez Carbajal, Barcel’s managing director, said the company had made a “considerable investment” in developing the degrading technology in coordination with Mexico’s state-owned research organization CONACYT (Consejo Nacional de Ciencia y Tecnología). He declined to be precise as to the size of the investment.

Symphony, which is publicly traded, has 30 full-time employees and clients in 50 countries. In Mexico, it already works with departmental store chain Liverpool, sports store chain Deportes Martí and clothing store chain Zara, among others.

Symphony forecasts sales of £8 million ($12.2 million) this year, up from £5 million ($7.6 million) in 2008.

In several presentations in Mexico City, Laurier said “plastic is a product that the world can’t stop using.

“We are one of the few companies that stand up and say you cannot and should not ban plastics,” he said. “We’re saying there’s nothing wrong with plastics.”

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PolyOne moves ahead with Asia strategy

Despite the economic slowdown, PolyOne Corp. is taking steps to push forward with its previously announced, two-pronged strategy of globalization and specialization by expanding in Asia and extending its portfolio of colorants, additives and various polymer materials.

Philippe Ximena, the firm’s Singapore-based general manager for engineered materials in Asia, and other company representatives provided a brief update May 19 at the Chinaplas show in Guangzhou.

Current market conditions have forced the Avon Lake, Ohio-based firm to make some adjustments, officials said.

A year ago at Chinaplas 2008 in Shanghai, PolyOne was heavily promoting its push into biopolymer compounds, some of which were being used by Springfield, Ill.-based Design Ideas Ltd. to make an Eco-Gen brand of bathroom accessories.

The recent slowdown in demand for relatively higher-priced biopolymers is prompting PolyOne to get creative.

It is developing blends of such materials with traditional resins like polypropylene, polyethylene and ABS, and working with brand owners to find end-use applications for these blends, said Jakey Low, Asia business development manager for color and engineered materials for PolyOne Shenzhen Co. Ltd. Low said PolyOne has not yet branded this line of products, which he said are made using the blending process generically known as biomass.

PolyOne is working directly with several original equipment manufacturers to integrate biomass blends into end products that include mobile phone handsets and USB modem housings. It also is helping brand owners to negotiate the diverse and often-changing laws related to meeting environmental marketing requirements, on a country-by-country basis.

Low said more details on PolyOne’s biomass products should be available at NPE2009, which will be held June 22-26 in Chicago.

PolyOne in April began initial production at a new color concentrates plant in India, according to Ximena, who recently relocated to Singapore from Europe to take up his current position.

The firm is finalizing the commissioning of production lines in India, but declined to provide further details. Its color concentrate products find use in various end markets, particularly packaging and wire and cable.

Ximena also noted that a PVC compounding plant in Dongguan, China, which PolyOne acquired in late 2006 and officially reopened a year ago, is busy serving new business in Asia. The plant is fully integrated with PolyOne, and the firm has begun lean manufacturing and Six Sigma programs at the South China facility.

Speaking of integration, Chinaplas 2009 represented the first time that PolyOne and its GLS Corp. thermoplastic elastomers subsidiary exhibited together at the same booth in China.

The strongest markets in Asia now for PolyOne’s engineered materials are electrical and electronics, automotive and health care, Ximena said. Demand in the construction market is softer, he said.

Ximena said industry in China is definitely starting to see the benefit of the Chinese government’s aggressive economic stimulus package. He added that he expects a similar uptick from Beijing’s stimulus plan for Chinese health care and hospitals, announced less than a month ago.

At Chinaplas, PolyOne highlighted its Kostrate Edge terpolymer, a BPA-free, Food and Drug Administration-compliant material that aims to replace polycarbonate, acrylic, styrene acrylonitrile and general-purpose polystyrene in certain applications. PolyOne is targeting end uses such as infant care cups, houseware items, drinkware and sports bottles, as well as appliance, point-of-purchase display, office furniture and personal-care applications.

The company also chose the Guangzhou show to introduce additions to its lineup of polymer additives. Its OnCap chain extender can increase viscosity by more than 15 percent for engineering thermoplastics that belong to a group of materials known as low intrinsic viscosity polycondensates.

The new OnCap UV absorber is designed to help protect plastic packaging from ultraviolet radiation. PolyOne says the additive also emits a blue tint to give products a clean, bright appearance. It is designed for PET bottles and other packaging.

Steven Chan, PolyOne’s Asia color sales and marketing director, claimed OnCap UV is the first such product available in Asia.

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California Legislature Fails To Pass 25 Cent Bag Tax

Unless it resurfaces as an amendment to an existing bill, the proposed 25 cent fee on plastic and paper single-use carryout bags in California is dead for 2009, along with several other plastics packaging-related proposals.

The legislature this week held for consideration until next year, bills that would have banned restaurants and food vendors from using polystyrene packaging containers, mandated a 50 percent reduction in polyvinyl chloride packaging by 2011 and required compostable plastics to have special labeling to make it easier to sort them in a recycling stream.

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In addition, an industry-backed producer responsibility bill that would have required manufacturers and distributors to pay .001 cent for each single-use carryout bag they provide to stores was held in committee and killed.

Another producer responsibility bill advocated by the California Film Extruders and Converters Association has been amended by the Senate to focus largely on education and training efforts, but is still alive.

Also still under consideration are a bill that would phase out rigid PVC packaging by Jan. 1, 2013 and flexible PVC packaging by Jan. 1, 2014, and another that would require that caps be affixed to single-use plastic beverage bottles, jars, cans and cartons.

Both the Senate and Assembly bills in California that had proposed a 25 cent fee on single-use carryout bags failed to meet the June 1 deadline for advancing to appropriation committees and now become two-year bills that will remain inactive until the 2010 legislative session begins.

“This demonstrates that politicians are being responsive to the mood of their voters and are unwilling to impose additional taxes on their constituents,” said Shari Jackson, director of Progressive Bag Affiliates, which is part of the American Chemistry Council in Arlington, Va. “I think California is now tracking the sentiment of the country — which is not to place an additional tax on residents during this economic recession.

“Any bills that have anything to do with adding taxes or charging consumers was not going to fly with legislators in this session,” said one plastics industry executive. “They have tabled all those issues temporarily. But the issue of a bag fee will rise again next year.”

Legislators nationwide have largely rejected fees and bans proposed on plastic bags in 2009. One exception: the Washington City Council on June 2 approved a 5 cent fee on plastic and paper bags. That proposal still requires a second yes vote in two weeks before it becomes law.

Connecticut nixed a proposed 5 cent fee June 2, New York Mayor Michael Bloomberg withdrew his proposed 6 cent fee last month, and Philadelphia rejected a proposed 25 cent fee on May 14. Texas, Maryland and Maine also rejected proposed plastic bag fees, ranging from 5-15 cents.

Still pending is a proposed plastic bag ban in Sacramento County and a vote Aug. 18 in Seattle on whether to place a 20 cent fee on single-use plastic carryout bags.

In addition, a potential ban on single-use plastic bags is pending in Edmonds, Wash., northwest of Seattle. City council approved the ban June 3, pending an environmental review. A second vote is required before the ban can go into effect in the town of 40,000, which is on the Puget Sound waterfront and has a marine sanctuary.

Nationwide, only Westport, Conn., and three California cities — San Francisco, Malibu and Fairfax — have bans on plastic bags. A ban in Manhattan Beach, Calif., was overturned in court, but the city is appealing that ruling.

The inability of the California Legislature to enact a 25 cent fee is “a little disappointing,” said Stephanie Barger, executive director of Earth Resource Foundation in Costa Mesa, Calif. She did not support the producer responsibility proposal that ACC had backed.

“I am not for that bill. I don’t think it does anything,” she said. “Either we need to ban [plastic bags] or have a high fee like Ireland.”

Jackson disagreed. “An additional tax is not the right way to go,” she said. “It is just a bad policy approach, and there is no overwhelming evidence that bans or taxes are working. This is the second year in a row that we are seeing a strong number of bills, but no ban or tax has been adopted at the state level.”

The Progressive Bag Affiliates, which includes the four major U.S. plastic carryout bag manufacturers, pledged in April to include 40 percent recycled content in their bags by 2015. “That will help drive the market for recycled plastic bags and film,” Jackson said. “This is an opportunity for us to demonstrate that recycling is working.”

The ACC-backed producer responsibility bill would have mandated the use of 30 percent recycled content by July 1, 2014. It also would have required manufacturers and distributors to arrange for take-back programs with grocery stores, and establish a 50 percent single-use carryout bag reduction by 2014, using 2010 as a baseline.

Communities with bans or taxes on bag would not have been eligible to receive any money collected by the state from bag manufacturers and distributors.

As amended in committee, the fees collected from manufacturers and distributors could not exceed the cost to the state of administering and implementing the program — as opposed to the $25 million cap that had been originally proposed.

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Bemis buys S. America Plants

Bemis Co. Inc. has expanded its rigid packaging business in South America through two acquisitions.

Bemis bought three plants in Brazil and one in Argentina from Huhtamäki Oyj. They join Bemis’ nine plants in Brazil and one in Argentina.

The Neenah, Wis., firm paid about $43 million for the former Huhtamäki operations. They generated sales of about $85.8 million in 2008. The plants make extruded sheet, yogurt cups, drink cups, dairy tubs and similar packaging using thermoforming and injection molding. Main markets are dairy and food service. They employ a total of about 640.

“This business will complement our existing South American operations,” stated Bemis President and CEO Henry Theisen in a June 3 news release.

The deal boosts Bemis’ sales in South America by more than 10 percent, according to Melanie Miller, Bemis vice president and treasurer. Bemis makes dairy tubs, folding cartons and flexible packaging in South America and claims to be the biggest packaging firm on that continent, Miller said in a telephone interview.

Bemis subsidiary Dixie Toga SA and Dixie subsidiary American Plast SA bought the Brazilian and Argentinian businesses, respectively. Bemis acquired Dixie Toga of São Paulo, Brazil, in 2005, Miller said.

Huhtamäki said last fall it was conducting a strategic review of its rigid packaging operations around the globe in favor of its core businesses of flexible packaging and molded fiber packaging.

“This sale represents an excellent outcome to the review of our rigid plastic consumer goods business in South America and supports the strategy execution,” said Huhtamäki CEO Jukka Moisio in a news release.

“We will continue to review the remaining rigid plastic consumer goods operations in Europe and in Australia,” Moisio noted. “In South America, we will continue to operate our flexibles and rough molded fiber packaging units.”

The businesses sold were Huhtamäki Plásticos Rigidos Brasil Ltda. and Huhtamäki Argentina SA. The former’s plants are in Pinhais, Recife and Valinhos, Brazil, while the latter’s plant is in Garin, Argentina.

Bemis paid $32.3 million in cash on hand, $1.9 million in assumed debt, and a $8.8 million note payable to Huhtamäki due May 31, 2010.

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