Cereplast Sees Growth Back in Market for Plastics Giants

Cereplast, Inc.  commented today that increased growth rates for plastic giants such as DuPont and Alcoa combined with higher costs for crude oil bode well for the bioplastics industry as science-based initiatives and green technologies begin to lead the way and the economic recovery takes hold.
On July 27, DuPont reported better-than-expected EPS for the second quarter of 2010 as profits nearly tripled, driven by strong emerging market demand and sales of specialty chemicals. The recovery in demand and cost reduction helped the company beat Wall Street estimates of $0.94 per share for the second quarter as the company reported profit of $1.2 billion, or $1.26 per share, versus $0.41 for the same period a year ago, and raised estimates for 2010. Sales to the automotive and industrial markets, which consume such materials as plastic components, rubber tires and hoses, increased during the quarter. Earlier this month on July 12, aluminum maker Alcoa, which also manufactures a wide selection of extruded plastics, reported better-than-expected earnings that topped analysts' estimates. Second quarter earnings came in at $136 million, or $0.13 per share compared to loss of $454 million, $0.47 per share, for the same period last year. Analysts had expected $0.12 a share for the quarter. Both DuPont and Alcoa are Dow components whose earnings are closely watched.
"The traditional plastics industry is very large and rebounding from a slump in global demand as reflected by better-than-expected earnings from DuPont and Alcoa, and this bodes well for our industry," said Frederic Scheer, Founder, Chairman and CEO of Cereplast, Inc. "Plastics are everywhere, on the clothes we wear, in the cars we drive as well as in countless industrial applications, consumer goods and electronics. The necessity of having alternatives, such as our bio-resins, is making sense to a lot of plastics manufacturers, driven both by consumer demand and awareness of sustainable alternatives and cleaner, environmentally-friendly solutions to petroleum-based plastics."
Industry production and sales for plastics in 2009 rose less than 1% for all major resins types, following a 12% decline in 2008, which was the lowest annual amount since 2001, according to data from Standard & Poor's. Monthly production and sales comparisons for the last four months of 2009 were positive against the same period in 2008, which experienced the downturn in consumer demand during late 2008. Year-over-year production and sales trends for the major resins in the first four months of 2010 have continued to recover, the data provider said, with total production up 7.4% and sales growing 5.8% from their reduced levels in the 2009 quarter.
"We have a solid outlook for 2010 and expect to ship approximately 16 million pounds of bio-resins to our customers this year, representing a 400% increased compared to 2009," added Mr. Scheer. "Bioplastics have the benefit of being fully compostable and are a compelling choice as the cost structure quickly becomes competitive with petrochemical plastics and consumers demand sustainable solutions that protect the environment. We believe the rebound in growth of the plastics industry at large will be a tremendous benefit to our bio-based resins as demand for our products grows."

Source:  Cereplast