Bioplastic Market to Grow as Prices Decline, Production Increases: Report

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OAKLAND, Calif. -- Demand for biodegradable alternatives to petroleum-based plastic is expected to more than double by 2012, according to The Freedonia Group.

The research company's new report, "Biodegradable Plastic to 2012," looks at the past, present and future of the biodegradable plastic industry, which includes starch-based, polylactic acid (PLA), polyester-based and photodegradable materials. The nearly-200-page report looks at markets, trends and companies in the industry.

In 2007, demand for biodegradable plastic topped 350 million pounds, and is expected to grow 16 percent each year to 720 million pounds, valued at $845 million, in 2012. The Freedonia Group says average prices for bioplastics will fall as companies ramp up manufacturing capacity and increase production efficiencies. The report expects bioplastics to become more price-competitive with petroleum-based plastics, with more environmental, government and consumer initiatives focusing on switching to bioplastic.

Starch-based products make up the largest section of the market, accounting for 39 percent of products in 2007, followed by PLA with 26 percent, photodegradable materials with 16 percent, and all other types making up the remaining 16 percent.

Most areas within the industry are expected to see more opportunities and growth, according to the report. PLA, a material derived from corn or sugarcane, should see the fastest growth. PLA is being used in plates, cutlery, clothing, textiles, bottles, carpets and a number of other applications. Most of the opportunities for PLA use, as well as for other bioplastics, are in packaging, such as film and containers, especially for food service.

In 2007, packaging accounted for more than 70 percent of all biodegradable plastic use. The fastest growth in that area is expected in molded items like containers and trays. The area that will see slower growth is biodegradable loose fill due to competition from inflatable bags and bubble packaging.

The report includes data from 1997, 2002 and 2007, with forecasts for 2012 and 2017.

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