As a company grows, it can often lose its creative agility - its ability to make decisions that go against sound judgment. When so much is riding on a business, it becomes harder to take risks, but for a company built on proprietary technology, it's essential to focus on innovation. Perhaps common sense says it's always better to be located closer to your customers, or that 100% sustainably sourced polymers are still years from being viable. However, it can pay to push boundaries and think outside the box.
Global plastics and resins manufacturer M&G Chemicals had to think laterally over the past year in order to expand its customer base in Central and South America. The company had maintained a steady customer base for PET barrier resin PoliProtect in Europe, supplied by its Italian plant, as well as a strong position in North America with a plant in West Virginia, and the planned construction of a new production site in Texas. But the closest plants didn't always prove to be the best option to serve their local markets, so the company came up with a creative fix. Early this year, PoliProtect production was transferred from Italy to M&G's Mexico plant, which opened in 2003 with an annual capacity of 450,000t - the highest single line capacity in the world for PET production at the time. The advantages of this move are clear for customers in Central and South America, who will no longer be hit with US export duties and will benefit from shorter lead times. But, as marketing and business development manager Cecile Bourland explains, the move was also a win for European customers.
"From Italy, we were actually supplying all of Europe by truck, which is quite costly. Now, we will be shipping by sea, and there is no duty for importation from Mexico to Europe," she says.
Shipping cargo from Mexico to northern Europe is less expensive than trucking from southern Europe. PoliProtect customers in Belgium, France and the UK, as well as Central and South America, will now reap the rewards of the Mexican plant's annual capacity of 100,000t - minus the steep import duties. Production numbers at the plant are decided month by month to adapt to changing market demands easily.
PoliProtect, the monolayer barrier resin at the centre of all this, is made with a proprietary M&G technology known as BicoPET, which incorporates into convenient pellets all the additives needed for active and passive-gas barriers for PET bottles. It's produced using M&G's standard PET process on a dedicated BicoPET production line, which was specially installed in the Mexico plant. Fully formulated at M&G plants before shipping, the pellets don't require converters to invest in new machinery for extra coatings or multiple layers. PoliProtect's strength as a barrier delivers long shelf life, as well as enhancing structural integrity and a sparkling, highly transparent finish in packaging.
Until recently, PoliProtect came in three grades for varying uses. PoliProtect APB is aimed at premium products needing protection from CO2 loss and oxygen ingress. PoliProtect JB features solely an active oxygen scavenger - a medium-level defence suitable for wine, fruit juices and condiments such as ketchup. The PB grade is a passive-barrier-only pellet, aimed at products where CO2 is the main concern; for example, carbonated water and soft drinks.
The newest grade is PoliProtect K, a variation of PoliProtect APB aimed at PET beer kegs. At up to 30L, they are much larger than most consumer PET bottles, and the barrier formula required some tweaking to suit their needs. Launched at the end of 2016 after rigorous year-long trials, it combines full oxygen and CO2 protection with enhanced mechanical properties to fit the requirements of larger containers.
"It's a new market," says Bourland, "because the breweries are starting to get more and more interested in switching from steel to PET kegs. It's very interesting cost-wise for them; a lot of the steel kegs don't come back to the brewery,
so it's a lost cost. The PET keg costs much less to produce than a steel keg, and we save on the transport costs because it's much lighter."
Despite the savings to be had, breweries have historically been slow to embrace PET or large kegs. The biggest issue was the integrity of the container: 20-30L of beer can put a keg under enormous pressure. Converters have only recently developed keg pre-forms to the point where they can reliably withstand the pressure.
The other roadblock to breaking into the beer market is that some breweries consider metal cans and glass bottles to be an important part of their image for consumers. However, consumers never see the kegs used in bars when beer is on tap, which makes them a perfect starting point for breweries looking to make the switch to PET.
Bourland says beer will continue to be a major focus for M&G's North, Central and South American expansion plans. "Until recently, there was a law that prohibited beer from being packaged in PET in Brazil, but this was lifted, so we will push for this new development of the market," she reveals.
M&G has a strong foothold in Europe and the North American market already, but Bourland highlights a few key areas for growth over the next few years.
"Regarding the Americas, we plan to expand our application to various foods like ketchup, salad dressing and mayonnaise. In Central and South America, we still have a lot to develop in the fruit juice market, and these are countries where they're rich in fruit, so it will definitely be a new area of development," she says.
Another major goal for the company is a push for a higher uptake of recycled PET in packaging. Currently, although PET can be recycled indefinitely in theory, most recycled postconsumer PET (rPET) isn't suitable for bottles. Paper label scraps, dyes and food traces, as well as the drying process used to form rPET chips, all affect the purity of rPET chips. The large proportion that don't make the grade are repurposed as polyester fibres, APET or strapping tape. M&G is a heavy investor in research and development - it created its own technology for PET production rather than purchasing from a third party - and for the past few years, the company has been working on a technique to produce consistently usable partially recycled PET. "We hope to be able to insert 10-15% recycled PET into our PoliProtect grades," Bourland says:
The process used is chemical recycling, in which the recycled PET is added before the rest of the production steps so that the quality of the end product is virtually unaltered in terms of strength, performance, adherence to food standards and aesthetics. But while PET is easily recyclable, it still comes from a fossil fuel source. Responding to market requests for better sustainability, M&G is also one of the most active players in the race to develop a viable method of producing biodegradable PET from renewable sources. As yet, there is no generally available PET alternative that is 100% bio-sourced.
A Hexa Research report published in December 2016 predicted a compound annual growth rate of 42% in volume for the bioPET market over the next eight years. Tightening environmental regulations and fluctuations in crude oil prices are forecast to be two of the main drivers of demand, along with the introduction of bioPET to the automotive and packaging industries. But ethanol, the most important raw ingredient for bioPET production, is already in high demand as a biofuel. It's produced through a sugar fermentation process that starts with crops like corn, wheat and maize. Those crops need to be specially grown for that purpose, which calls into question the environmental sustainability of relying on them to produce bioPET as well as fuel.
M&G's goal is to use agricultural waste to produce ethanol for 100% 'second-generation' bioPET. It neatly solves an environmental problem for the agricultural industry, and draws on a widely available resource that's not already spoken for, making it an all-round sustainable solution. The company has now been producing bioethanol from non-food biomass at its Italian plant for three years. It's been a long road, but Bourland says M&G is now ready to take the next step to bring to market its proprietary technology for manufacturing bio-sourced MEG and paraxylene - the two major chemicals needed to make PET.
"We have already developed technologies at the pilot plant level ,and are in discussion with various partners in order to go to the next phase, which will be the production of a demo plant in order to validate the technologies and the assumptions regarding costs," says Bourland.
Staying at the top of the plastics game requires inventiveness and the ability to invest in solutions that aren't immediately obvious. Through market fluctuations, tech evolutions and the changing state of our planet, M&G's corporate tradition of research and development, combined with deep logistical understanding, are the keys that will keep the company developing far into the future.