January 13, 2012

Metabolix, ADM cut bioplastic ties

I guess when US agribusiness major Archer Daniels Midland wants to cut costs, they really mean cutting costs and that include 1000 job layoffs (3% of the company's workforce) and dissolving its bioplastic joint venture Telles LLC with Metabolix as the JV's capital costs were more than anticipated, commercialization of Telles' bioplastic product took longer than expected, and projected financial returns are "too uncertain," according to ADM.

Telles, which was created in July 2006, is on the verge of a 1m pound commercialization milestone for its polyhydroxyalkanoate (PHA) bioplastic, Mirel, expected in March. Customers are currently testing Mirel, which were being produced by ADM Polymer, the subsidiary of ADM, at the newly constructed 110m lb/year (50KT/Y) Clinton, Iowa, plant.

According to Metabolix, Telles has ongoing sales activities primarily in the US and Europe working approximately with 100 customers and prospects -- 57 active and 26 repeat buyers.

Unfortunately for Metabolix (and the company said this is an unexpected news), ADM has now decided to evaluate other commercially viable uses for the Clinton facility leaving Metabolix in the commercial lurch although ADM said it will continue to provide PHA fermentation services for Metabolix during a 3-year period following the termination of the JV.

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