Cereplast to shift bioplastic production to toll compounders

Bioplastics supplier Cereplast Inc. is halting production at its California plant and will not open a recently finished facility in Indiana.

The Hawthorne, Calif.-based Cereplast will now have its products produced by compounders on a toll basis.

Production in Hawthorne will continue until Cereplast reaches an agreement with an outside compounder.

Cereplast had operated about 45 million pounds of compounding capacity in Hawthorne for bioplastic compounds based on polylactic acid (PLA) resin sourced from NatureWorks LLC.

The company’s Seymour, Ind., plant — built at a cost of between US$3 million and US$4 million — was set to employ 15, with an estimated annual production capacity of 50 million pounds.

“This is the painful part of growth,” Cereplast chairman and CEO Frederic Scheer said in a news release. “Unfortunately, we will not be able to include many of our manufacturing employees as we move forward.”

“To accelerate our growth, Cereplast will focus its efforts on the product development and marketing core strengths that have propelled us into a leadership position in proprietary bioplastics,” he continued. 

Cereplast doubled its 2007 sales in 2008, to US$4.6 million, but the firm still lost almost US$13 million after losing almost US$12 million the year before.