Japan develops new materials for corn plastic packaging

The rise in oil prices not only affects the transportation industry, but also the production of petrochemical products such as various plastic products. Recently, a Japanese company took a different path and prepared to use corn as raw material to make plastic food containers to replace chemical plastics.

This food packaging box manufacturer is located in Kawasaki, in the middle of Japan, and has been researching plant plastic products for 15 years. Their products were exhibited at the Aichi Expo last year. At present, they have decided to import corn from the United States and produce corn plastic packaging boxes. In 2007, the company will also set up a production line in Gunma Prefecture, north of Tokyo, to produce plastic food containers that use plants as raw materials. It is expected that sales will reach 18 million U.S. dollars within three years.

However, the cost of producing plastics from plants as raw materials is high. Fortunately, the price of oil has been rising recently, and the difference between plant plastic products and petroleum-based chemical plastic products is shrinking. Therefore, the prospects of the corn plastic packaging industry have been favored by many people. According to Formosa Petrochemical, a large petrochemical company in Taiwan, revenue growth in 2006 is expected to exceed 10% due to higher oil prices and increased capacity of refineries. The company also pointed out that capital expenditure this year will reach TWD 28 billion, which is lower than TWD 30 billion last year.

Formosa Plastics general manager Wang Wenchao said that revenue will increase and it should exceed 10%.

The company said that the annual revenue growth estimate is based on the assumption that the oil price is $54 per barrel. The company's current refining capacity is 510,000 barrels per day, which is expected to increase to 540,000 barrels after the bottleneck is removed later this year.

Formosa Petrochemical’s revenue in 2005 was NT$443.320 billion, an increase of 27.6% from the value of RMB344.420 billion in the previous year; net profit last year was RMB57.25 billion, an increase of 13.9% from the previous year. The company's net profit for the first quarter of this year was 4.457 billion TWD, compared with 17.291 billion the same period of last year, and the decline was as high as 74.2%.

The company is the only private oil refiner in Taiwan with a daily refining capacity of 510,000 barrels, mainly export-oriented. In Taiwan's domestic market, Formosa Petrochemical's only adversary is Zhongyou, which has a market share of 70% in Taiwan's oil products market.

Source: National Plastics Processing Industry Information Center