Bioplastics Industry
Given the rising demand for more environmental protections and resource conservation by the general population, many companies also are putting together strategies on how best to base the improvement and manufacture of their products upon the concept of greater sustainability. Above all, ever-rising crude oil prices have led the general plastic industry to invest substantially more in the research and development of bioplastics. Indeed, increased demand for bioplastics provides, in turn, for an expansion of production capacities. Bioplastics are a new generation of biodegradable plastics, made entirely or almost entirely from renewable raw materials. Recent advances in research and technology have shown that these plastics can be made from abundant agricultural resources. They preserve nonrenewable resources - petroleum, natural gas, and coal - and contribute little to the already burdensome problems of waste management. Derived from renewable biomass sources such as plant starches and vegetable fats, bioplastics are a cutting-edge biodegradable technology seen by many as a sustainable alternative to chemically produced plastics. The most widely known types of commercial bio-plastics include polylactic acid (PLA), polybutylene succinate adipate (PBSA), polybutylene adipate terephthalate (PBAT), and polyhydroxyalkanoates (PHAs). There is mounting demand for these biodegradable, environmentally friendly products as the populations of many countries have become increasingly environmentally conscious. It must be mentioned that the global demand for bio-plastics is expected to more than triple to an approximate worth of US$2.9 billion by the year 2015. Starch
based resins and PLA are expected to more than double in demand by 2015, while PHA resins are expected to show the greatest increase in demand. Thailand, a country that is home to a strong, thriving agricultural base and advanced technologies as well as research-driven resources, provides a competitive advantage to the bioplastics industry. The combination of copious and affordable raw materials and modern manufacturing facilities places Thailand in a strategic position as a nation readying itself to become one of the global hubs for the emerging bioplastics industry. As previously mentioned, the Kingdom of Thailand boasts a flourishing agricultural sector in products such as rice, cassava, sugarcane and cellulose and is the world's biggest cassava exporter and second largest exporter of sugar. Furthermore, as the second biggest food exporter in the Asia Pacific after China, Thai agriculture possesses the size and capacity to be used as biomass feedstock for bioplastics. Hence, those investing in the bioplastics industry are afforded incalculable benefits like ready access to biomass feedstock at competitive prices and enhanced price stability. Similarly, manufacturing raw biomass materials into bioplastics is a profitable, value-added business opportunity that can diversify Thailand's established plastics industry and push forward the country's goal to move its economy up the value chain and compete in world markets. In addition, bioplastics can meet the growing demand for biodegradable products in nations with consumers that are environmentallyconscious. Through the effective promotion of the bioplastics industry, Thailand can convert itself into an advanced, knowledge-based economy. Keep these figures in mind. In May 2013 Thailand's import value of general plastic products amounted to 9,260 million baht, a decrease from April of 0.3 percent. General plastic products in other categories experienced the highest import value of 3,740 million baht or 40 percent of the overall value, followed by general plastic products of film type with the import value of 1,344 million baht or 15 percent of the overall value. For overall imports, the three most important source markets were Japan, China, and Malaysia. On the other hand, in May 2013 Thailand's export value of general plastic products amounted to 9,072 million baht, an increase from April of 19.2 percent. General plastic products under the packaging category had the highest export value of 2,766 million baht or 30 percent of the overall value, followed by general plastic products in other categories with the export value of 2,100 million baht or 23 percent of the overall value. For overall exports, the three most important destination markets were Japan, USA, and Indonesia. Briefly put, the Thai general plastics industry is advancing and expanding in terms of both production capacity and capital value. Of equal significance, the manufacture for export of general plastics is a true growth sector and it is
apparent there are markets for these items. But what about bio-plastics? Can Thailand transform itself into a "green" economy? Thailand offers an existing and broad value chain network to the emerging bioplastics industry. The Kingdom already has a reputation as a strong competitor in the plastics industry and owns the requisite resources and infrastructure necessary to be a global leader. According to the International Trade Center, Thailand was ASEAN's second leading exporter of plastics products after Singapore and was ranked 20th in the world in 2012. Moreover, Thailand currently counts more than 3,000 companies in the domestic plastics industry. With such a large presence in plastics manufacturing evident in the Kingdom, it is not difficult to find operating facilities in every stage of the bioplastics value chain process, ranging from biomass processing to biomonomer and biopolymer industries. Likewise, Thailand boasts incredible potential in its established value chain for plastics, ranging from basic intermediates to midstream technologies, such as compounding, and downstream industries, such as molding. For instance, to highlight the conversion capabilities of Thailand, a plant was established in 2007 to produce lactic acid, the main raw material for PLA, and it has been in operation ever since. This illustrates that these established plastics industries can be used effectively to manufacture biomass into high-value-added bioplastics. The Thai Government has taken an active role in promoting the bioplastics industry with the goal to make Thailand the ASEAN hub for bioplastics. Hence, the Government appointed the National Innovation Agency (NIA) to create a national roadmap for the development of the bioplastics sector as a "New Wave" industry. Additionally, the Government also put together many incentives to support investment in the country's burgeoning bioplastics industry. Equally important, the Thai Bio-plastics Industry Association (TBIA) at present has a memorandum of understanding (MOU) with a number of global institutions to cooperate in developing harmonized certification and identification programs and scientifically based tests and specifications for bioplastics products. The MOU also calls for further collaboration in areas such as technology development, capacity building, joint ventures, and market expansion to stimulate greater progress of the bioplastics industry globally. Similarly, the Government of Thailand has worked closely with other interested parties, like the NESDB, to create a roadmap to support investment in the country's emerging bioplastics industry. In fact, the National Innovation Agency (NIA) will be the key coordinator to convert the roadmap from an idea on paper into actual practice
To ensure the most efficient execution of the bioplastics roadmap, four key strategies were identified and the implementation is planned to last over the next five years (2011-2015). Brief outlines of the four policy approaches are as follows: Strategy One : Generating a sufficient supply of biomass feedstock ->> This plan targets the preparation of adequate quality and quantity of raw materials for the industry without having to interfere with the food supply. Strategy Two : Accelerating technology development and technology cooperation ->> This plan not only focuses on the adoption of overseas technologies, but also aims at having local researchers and scientists to facilitate technological advances and innovation beyond those technologies that are being utilized by the industry. The goal of creating the country's own sustainable technology base is at the heart of this strategy. Strategy Three: Fostering industry and innovative businesses ->> This plan advocates an investment approach in bioplastics industries and businesses from both upstream and midstream stages right to the downstream phase both at the international and local business levels. Strategy Four : Establishing supportive infrastructure ->> This plan includes the creation of industrial standards, setting up laboratories for testing and certifying bioplastics products, raising public awareness on the need to use bioplastics products for environmental reasons, implementation of a pilot project for bioplastics utilization in small municipalities or communities. Over the past decade, the Thai Government has taken an active role in pushing forward the bioplastics industry in order to support Thailand's ambition to become a regional and worldwide leader. The Ministry of Science and Technology was assigned to direct the project along with the support of both the Ministry of Industry and the Office of the Board of Investment of Thailand (BOI). Additionally, a working committee was appointed by the National Innovation Agency (NIA) to create a national roadmap for the development of bio-plastics as a "New Wave" industry.
Generally speaking, Thailand has many advantages and strengths. With the proper government policy supports, in areas like environmental protection, trade and investment, and technology invention and application, the country has the potential to play a leading role in the expansion of the bioplastics industry throughout the ASEAN region. Plus, there is an abundance of sugar and starchbased feedstock at competitive prices. At present, Thailand is the world's 22nd largest exporter of bioplastics, with exports totaling some US$2.92 billion in 2010, an increase from US$2.37 billion in 2009. The main exports are film sheets and packaging material. Likewise, as of 2012, total investments in this sector amounted to about 22 billion baht, producing products such as lactic acid dimer to packaging material to PLA resins. Taking into consideration the vast potential profit earnings of the bioplastics sector, on the 21st of January 2013 the Thai Government assigned the Ministry of Energy to be the principal agency in establishing a mechanism for the development of measures to promote Thailand as a hub of the bioplastics industry in ASEAN. In cooperation with the Ministry of Agriculture and Cooperatives, the Ministry of Industry, the Ministry of Science and Technology, the Ministry of Commerce, and the private sector, the Ministry of Energy seeks to draft comprehensive policies, to increase accessibility to essential raw materials, and to select the appropriate pilot city. Certainly, Thailand's bioplastics roadmap and full range of incentives to encourage investment have attracted many specialized firms such as Corbion/Purac (lactic acid and lactide), PTTGC/NatureWorks (polylactic acid), Bioamber/Mitsui (succinic acid) and PTTMCC Biochem (polybutylene succinate adipate). With Southeast Asia projected to become the world's major bioplastics manufacturing region in the next 10 years, the country is readying itself for the commercial opportunities of the future by continuing to implement its blueprint, develop new innovative technology and build its infrastructure and logistics networks. The general plastics industry is forecast to progress in line with the economic growth of the country. In 2013 the Thai economy is expected to expand approximately 4.2-5.2 percent. Moreover, the Government's inbound and outbound investment promotions will result in more consumption demand and the increased export of general plastic products. Yet room exists for the development of the bioplastics sector. As part of its policy to promote sustainable development, enhance the country's competitiveness in science and technology, encourage the improvement of manufacturing quality as well as reduce environmental pollution and waste, the Office of the Board of Investment of Thailand offers special tax incentives in specific activities that support national development objectives. Furthermore, in recognizing the value of the bioplastics industry to the future of Thailand, the BOI has classified two enterprises related to bioplastics - manufacture of ecofriendly chemicals and manufacture of eco-friendly products - as priority
activities of special importance and benefit to the country. In fact, the aforementioned enterprises involve standard BOI incentives such as an exemption of import duties on machinery and an 8-year exemption of corporate income tax with no cap. Likewise, these projects can be located anywhere in the country, except for Bangkok, and investment promotion applications can be submitted by the 31st of December 2013. Companies that have been designated as BOI-approved are then eligible to receive added tax incentives under the BOI's Investment Promotion Policy for Sustainable Development, which includes: • Exemption of import duties on machinery • 8-year exemption of corporate income tax with no cap • 5-year 50% reduction of corporate income tax on net profit • 10-year double deduction of transportation, electricity and water supply costs • Deduction from net profit of 25% of investment in infrastructure installation and construction costs, in addition to normal capital depreciation