Much has changed over the past 40 decades. Older readers may recall the 1967 motion picture “The Graduate,” in which Dustin Hoffman got his first big break. One of the more memorable pieces of dialog in that film went like this:
Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
In the past few years, plastics have taken a public relations nosedive. Environmentalists decry everything from the plastic rings that harness six-packs of drinks to plastic shopping bags that float eerily in the wind (sort of like in the 1999 film “American Beauty”). Most plastics are virtually indestructible and are clogging landfills around the globe. Shoppers have been encouraged to buy re-usable cloth sacks to help clean up the environment. The latest bad news for plastics came in reports that claim a compound used in hard transparent plastic bottles, bisphenol A, or BPA — a compound created by a Russian chemist in 1891 — creates health risks. The fact is, however, that the world is as dependent on plastics as it is on oil or electricity.
Like the old adage says, “necessity is the mother of invention”; and scientists are looking for safer, greener ways to make plastics [“I Have Just One Word for You: Bioplastics,” by Mara Der Havanesian, BusinessWeek, 30 June 2008 print edition].
“For half of his life and all of his 25-year career as a bioengineer, Oliver P. Peoples has wanted to prove two things: that he could reengineer plants to grow biodegradable plastic in their cells and that he could make a lot of money doing it. On the first goal, Peoples has had astonishing success. His Cambridge (Mass.) company, Metabolix has harnessed the complex genetics of plant-cell metabolism and collected hundreds of patents on a process for manufacturing ‘bioplastics’ in large vats of microbes. A $200million factory is under construction and could start producing Metabolix’s bioplastic, called Mirel, early next year. But Peoples’ second mission, amassing wealth for himself and his investors, is glaringly incomplete. … The company is now in a crucible every struggling biotech encounters. As it awaits commercial production, it is burning through cash. And it must carefully pick the right customers to showcase Mirel’s wide range of applications, from gift cards and cosmetics cases to plastic bags and computer parts.”
Despite the fact that Peoples burn-rate is high, so are his expectations of success. Peoples believes the timing of his product is just about perfect.
“As oil prices spike up, so does the cost of plastic materials, virtually all of which are petroleum-based. In addition, consumer groups and environmentalists around the world are in an uproar over the billions of tons of plastic waste that get dumped at sea or buried in landfills and over the health effects of related toxins. Almost 30 million tons a year of plastic solid waste is dumped into the U.S., and about 5% is recycled. These trends fuel demand for novel bioplastics that aren’t linked to pricey fossil fuels and don’t harm the environment.”
Peoples’ greatest concern should be about competitors. Even producers of traditional petroleum-based plastics are muscling their way into the bioplastics field.
“DuPont fired up its first biomaterials plant in 2006, selling more than a $100 million worth of products in the past year, including its bioplastic called Sorona. Starting in 2009, Cargill’s NatureWorks unit hopes to ship 140,000 metric tons a year of a bioplastic called Ingeo, for use in fresh food containers and textiles, among other things. Brazilian petrochemical giant Braskem is spending $300 million on a factory for sugarcane-based bioplastics, while Toray Industries of Japan is making plastics from fermented plant starches and sugars. There’s also a host of U.S. startups with names such as Novomer and Cereplast that make plastics from wheat, tapioca, potatoes, soy, and more. ‘We’ve gone from being mad scientists to being visionaries,’ says Frederic Scheer, CEO of Cereplast, based in Hawthorne, Calif.”
Peoples, however, believes he has an edge over the competition.
“All [of the competitor] materials are green in the sense that they reduce dependence on fossil fuels. But while rival bioplastics must be incinerated or composted at high temperatures, Mirel will decompose if it is simply tossed in a home compost heap or dumped at sea. ‘Mirel is the one that works in all environments,’ says Joseph P. Greene, a professor in mechanical engineering and manufacturing at California State University at Chico, who was hired by the state to find the best bioplastic on the market. ‘It breaks down nicely with food or yard waste. Boom, 180 days later and it’s nice brown dirt.’ What’s more, the manufacturer determines how fast the plastic biodegrades into harmless plant materials and the conditions under which that happens.”
Mirel’s environment edge hasn’t gone unnoticed. Organizations concerned about their “green” image from Target to the U.S. military are testing Mirel in products.
“About 50 potential customers, including Target, Revlon, Hewlett-Packard, medical supply company Labcon, and the U.S. military, are testing Mirel in more than 70 different products. ‘We have to do something [because] most plastic just ends up in a bad place,’ says Jim Happ, president of Labcon, which is testing Mirel to replace some 3 million pounds of plastic it uses each year in 800 products for hospital labs. ‘We love their polymer,’ says JoAnn Ratto, an engineer at a U.S. Army research center in Natick, Mass., which is evaluating Mirel as a liner for waste bags that are thrown overboard by naval ships. ‘We can’t get enough of it.'”
Der Havanesian reports that the process for producing Mirel can be simply explained but such an explanation doesn’t capture the genius and hard work behind the techniques that were used to create it.
“Mirel is made in large vats of genetically modified microbes. They gorge on glucose from corn, then convert the sugar into fatty globules, which make up more than 80% of the cells by weight. These are harvested, dried, and turned into pellets. It all sounds painless enough, but getting the microbes to comply requires marvels of genetic engineering.”
Peoples journey from a young boy in Scotland to entrepreneur in America is interesting and provides some insight into an entrepreneur’s mindset.
“He grew up poor in Slamannan, a remote, windswept coal mining town between Glasgow and Edinburgh. His father died when he was 16, leaving little for his family of 11 children. ‘Olly’ was spared a life in the mines by the attention of his high school chemistry teacher, who helped him get into the prestigious University of Aberdeen. After he earned his PhD in molecular biology in 1983, he landed a postgrad spot at the Massachusetts Institute of Technology. Pulling himself out of poverty and cultivating a competitive streak at MIT prepared him for the life of an entrepreneur, says Pamela Bassett, a Cantor Fitzgerald analyst in New York. ‘Most scientists want to publish, especially if you’re at MIT,’ she says. ‘Olly wants to commercialize.’ With a background in biochemistry, Peoples sensed early on that genetic engineering would open up whole new commercial landscapes. Most of his lab mates were interested in medical biotech, and several started companies that hit the jackpot, with lush buyouts by drug giants. Peoples yearned for a similar fate. But unlike many of his peers, he bypassed medicine and plunged into industrial applications. MIT filed for patents on his work in 1987, and by the time they were approved four years later, Peoples had negotiated exclusive licenses and mapped out a business plan for a new company.”
In previous posts, I’ve noted that entrepreneurs are driven to see their ideas take shape and then take hold. Entrepreneurs are often a combination of idea generator, salesman, and motivator. They are not idealists, but passionate, hard-nosed business people who can’t understand it when others fail to grasp their vision. Peoples is no exception. According to Der Havanesian, Peoples believed that others would immediately grasp the potential of his idea and that venture capital would flow freely. It didn’t. To stay afloat, he went through eleven rounds of financing, plus an initial public offering. The market for bioplastics remains small but is growing.
“Total global production of bioplastics is still minuscule. All the manufacturers combined will generate only about 1 million tons a year by 2010, analysts say, compared with 500 million tons a year of the petro-based variety. But these ordinary plastics, which account for up to 10% of total U.S. oil consumption, are quickly becoming an extravagance at $138 for a barrel of crude. A switch to bioplastics not only would help reduce oil dependence but also could save companies and consumers serious money.”
The one big drawback facing Mirel at the moment is that it is made from food crops. With crop prices rising and humanitarians urging companies to stop using food crops for purposes other than feeding people and livestock, Peoples is conducting more research and development to try and make Mirel even more attractive to customers.
“Having proved his science is valid, Peoples wants to scale up production of Mirel without relying on food crops such as corn. Funded by the U.S. Energy Dept., he’s trying to bioengineer switchgrass and other plants to produce the plastic in their leaves. If he can pull it off, Metabolix could reap billions of pounds of bioplastics on just a fraction of the acreage currently given over to corn. It’ll be a challenge, but Peoples, ever the scientist, says: ‘The stuff that is easy to do is not that interesting.'”
Another BusinessWeek article written by Joshua Schneyer, reports that Brazil has big plans about becoming the world’s leading producer of bioplastics [“Brazil’s ‘Organic’ Plastics,” 24 June 2008]. The country currently produces biofuels from sugarcane and is also looking to sugarcane to produce bioplastic.
“Already the No. 8 producer of petro-based plastics, Brazil will soon be the largest producer of organic ones, according to Dow and Braskem. Both companies say they’ve mastered technologies to turn sugar cane into polyethylene, the most popular plastic. By 2012, about 10% of Brazil’s plastic will come from cane instead of petroleum.”
As noted above, however, Mirel has a distinct advantage over sugarcane-based plastic in that it is biodegradable. In addition, sugarcane crops are already a source of contention for environmentalists.
“Not everyone believes that sugar cane should be used for plastics. Dow and Braskem plan to burn 300 million gallons of ethanol in 2012, around 6% of Brazil’s current output. Critics say using edible crops for energy has fueled the runup in global food prices. Some say cane farming is pushing Brazil’s agricultural frontier north into the Amazon forest, and that pre-harvest cane-burning, a common practice, lifts Brazil’s carbon emissions. And, like conventional plastic, Brazil’s cane plastic won’t break down easily in the environment. That which isn’t recycled may end up in landfills, or worse, swirling around the Great Garbage Patch, a Pacific Ocean vortex that eventually sucks in large volumes of plastic floating at sea.”
The technology challenges involved with bioplastics will eventually be solved (Peoples has proven that) and the economics of oil will make bioplastics commonplace in the future. As a result, the plastics industry should remain sustainable and plastic products remain affordable even after the “oil age” passes. That is why BusinessWeek wrote, “I have just one word for you: bioplastics.” Mr. McGuire may have been right all along.