news Cereplast files for bankruptcy
US-based bioplastics maker Cereplast filed for Chapter 11 bankruptcy protection on 10 February in a move designed, the company said, to strength- en its balance sheet, clean up its capitalisation structure, and improve financial flexibility as it realigns operations. The company, which
reported a loss of US$34.0 mil- lion on total sales of US$2.1 million for the nine months to September 2013 when it owed a total of US$121 million, said these realignment plans would better match its cost structure to the realities of its markets. “We have taken a number of
steps to improve our opera- tions over the past few months and we were making great progress,” said CEO Frederic Scheer. “However, the lack of traction of bioplastics demand in the United States, the repetitive delays in implemen- tation of the bioplastic
Cereplast CEO Frederic Scheer frustrated by lack of demand in US and delays in European regulations
regulation in Europe, and especially in Italy, combined with the legal problems created by several of our lenders made clear to our Board that reorganization was the proper path forward.” The lender problems include
moves by Horizon Technology Finance to convert the Chapter 11 filing to a Chapter 7 filing
(which would see Cereplast wound up) and to block plans announced by Scheer to take on a Debtor in Possession loan of up to US$1.0 million from ProCap Funding. Horizon claims Cereplast is in breach of its loans and that by continuing to trade would be using its cash collateral. Cereplast is defending itself
against Horizon’s claims. It has also initiated legal actions against two other investors – Magna Group Capital and Hanover Holdings. Cereplast’s business
strategy has changed consid- erably over the years since it was established in 2001. The company turned away from its original plan of producing its own bioplastics in 2009 in favour of outsourcing produc- tion. In 2010, it relocated from California to Indiana where it again resumed manufacturing. In 2011, it announced plans to
build a €12 million compound- ing plant in Umbria in Italy to exploit the country’s biode- gradable carrier bag law. Work on this plant has been delayed and may be abandoned. In technology terms,
Cereplast has also turned its focus away from its original starch-based bioplastics in favour of more traditional compounded products, recycling of polyolefins, and bioplastics produced from PLA and algae feedstocks. Cereplast founder Frederic Scheer has a long association with the bioplastics industry. In 1996 he secured exclusive North American distribution rights for the starch-based bioplastics developed by Novamont of Italy. In 2000 he ended that distribution agreement and the following year established Cereplast as a manufacturer of bioplastics. ❙
www.cereplast.com
Polykemi partners with Omni Plastics
Swedish compounder Polykemi has signed a cooperation agreement with USA-based Omni Plastics which will provide local production of Polykemi’s compounds for the North American market. The agreement gives
Polykemi manufacturing on three continents – it operates its own plants in Ystad, Sweden, and in Kunshan, China. The company produces a wide range of technical compounds based on polypropylene and engineering thermoplastics. Omni Plastics is based in
www.compoundingworld.com
Evansville, Indiana, USA, and specialises in a similar range of engineered materials. Ola Hugoson, Polykemi’s CEO, said: “Omni Plastics combines state-of-the-art technology with unmatched efficiency to guarantee cost-competitive, high-perfor- mance thermoplastics.” Polykemi’s executive VP
Lars Hugosson added: “A Polykemi customer can rest assured that the agreed quality is the same regardless of the production location”. ❙
www.omnithermoplastics.com ❙
www.polykemiinc.com
Celebrating the deal (left to right): Greg Riedford, VP operations, Omni; Johan Hugoson, area manager, Polykemi; Ola Hugoson, CEO, Polykemi; Mike Wilson, national sales manager, Omni; Lars Hugosson, executive VP, Polykemi
March 2014 | COMPOUNDING WORLD 5
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