Cardia Bioplastics signs AUD$1.8m compostable packaging supply contract for American market
Australian global sustainable packaging developer Cardia Bioplastics Limited (ASX: CNN) has signed an international supply and licensing agreement, on confidential terms, with a United States packaging supplier
Cardia will manufacture and supply a range of its sustainable packaging products under a joint branding license. Based on the forward projections of the American packaging company, Cardia is expected to realise revenue of at least AUD$1.8 million per annum.
Cardia Managing Director, Dr Glatz said the agreement was signed following performance testing of the Cardia Compostable product technology, which met stringent USA compostability standard ASTM6400. The Supply and License Agreement also provides for product co-branding, and this co-branding will further enhance Cardia Bioplastics' profile amongst American consumers.
"It is Cardia's first substantial contract in the large American packaging market and comes within weeks of signing several supply agreements in both China and Australia," he said.
Dr Frank Glatz said the US contract was underpinned by strengthening demand for bioplastics in North America, with business and consumers demanding ‘greener' alternatives in all kinds of packaging products.
He said several cities, including San Francisco and Seattle, had legislated to ban the use of non-compostable carrier bags and several state governments, including California, Texas and Minnesota were also expected to follow suit.
"US President Barack Obama has also announced a new green plan to use less oil and is committed to seeking more renewable and sustainable options," Dr Glatz said.
"The Cardia Bioplastics range of renewable BiohybridTM and certified compostable products using Cardia's proprietary technology has created significant interest in the USA."
Cardia has established local technical support and the logistical infrastructure to ensure effective supply capability into the USA from Cardia's modern manufacturing plant in Nanjing, China.
"We are ready to expand into the USA and this supply agreement is further endorsement that our Bioplastics products are now being internationally sourced by customers." Dr Glatz said.