Friday, June 22, 2007

Plastic from Ethanol


By ADAM SCHRECK AP Business Writer
© 2007 The Associated Press

NEW YORK — Brazilian chemical company Braskem SA said Thursday it has
produced the world's first polyethylene plastic made entirely of
renewable raw materials in a bid to develop "green" plastic for
commercial markets.

The petrochemical company, South America's largest, said it developed
the plastic from ethanol made from sugar cane. U.S.-listed shares of
Braskem jumped more than 4 percent on the news, nearing their 52-week
high of $18.73, reached in early May.

Chief Executive Jose Carlos Grubisich said the plastic is the same as
existing petroleum-based products and could potentially be used in a
wide range of household goods.

"We are handing millions of consumers in Brazil and around the world a
modern product for modern needs," he said at a press conference in
Brazil that was broadcast over the Internet.

Polyethylene is a common plastic used in a wide variety of consumer
products, including plastic bags, carpet, drink bottles and food jars.
Like traditional polyethylene, the ethanol-based plastic would be
recyclable, Grubisich said.

Braskem has contacted Brazilian and international companies about
possibly integrating the "green" plastic into their product lines,
Grubisich said. He declined to name the companies, citing
confidentiality agreements.

"We're talking about global brands that are in North America, Europe and
Asia," he said in an interview with The Associated Press. Some only want
to purchase the finished product, while others have expressed interest
in investing in the production process, he said.

Beta Analytic, a Miami-based laboratory that specializes in carbon
testing, certified that the new plastic contains 100 percent renewable
raw material, Braskem said in a statement. A Beta Analytic spokesman
said the lab does not comment on any work performed without written
authorization from its clients.

Braskem is not alone in the emerging plant-based plastics business.
Chemical giant DuPont Co. and agri-processor Tate & Lyle PLC earlier
this month opened a $100 million facility to produce propanediol made
from corn. The companies say the product, a clear liquid used in
nontoxic antifreeze, can replace petroleum-based ingredients in certain
types of plastic.

Braskem said its "green" plastic, which the company says is unique
because it is made entirely from renewable raw materials, is the result
of a $5 million research and development project. Industrial scale
production of the "green" polyethylene is expected to begin at the end
of 2009, with annual production capacity currently estimated at up to
200,000 tons.

Brazil leads the world in ethanol production. Because of the country's
relatively cheap ethanol prices, Grubisich said he believes Braskem's
"green" plastic will be competitive with petroleum-based polyethylene
given existing market conditions.

He added that certain industries might be willing to pay a premium of 15
percent to 20 percent for the product.

"You have many market segments where this green technology creates more
value interest than others," he said.

American Depositary Receipts of Braskem rose 74 cents, or 4.3 percent,
to $17.95 in afternoon trading. In the past year the stock has risen
from a low of $8.75 to peak at $18.73 last month.

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