Cereplast Completes Purchase of Italian Plant

Cereplast Inc., a manufacturer of bio-based compostable and sustainable plastics, has completed the purchase of a manufacturing plant in Assisi, Italy. The company says the new facility will serve as the hub for the company's European bioplastics production business. The company says its European initiative will allow it to expand its capabilities to produce and deliver bioplastic products to the European marketplace.

"This purchase reflects Cereplast's strong commitment to serving Europe's burgeoning bioplastics market, and we're proud to be the first bioplastics manufacturer to have production facilities on two different continents," Frederic Scheer, Cereplast chairman and CEO, says. "This new plant strengthens our ability to meet soaring demand for bioplastics in the region, which is expected to reach one million tons by 2014 according to European Plastics, representing an approximate 33 percent increase per year. Upon completion of the first phase of development of the plant, we will have dramatically expanded our manufacturing capacity from 36,000 tons to 86,000 tons, which will enable us to satisfy the accelerating number of supply and distribution agreements we continue to secure."

According to Cereplast, the Italian bank Monte De Paschi di Sienna (MPS) will provide funding to cover most of the costs associated with the purchase and refurbishment of the facility. Another Italian bank, IntesaSanPaolo Bank, participated in opening credit facilities to Cereplast Italia SpA with the support of another Italian financing agency Eurofidi. The remainder of the project will be subsidized with loans and grants from local government agencies.

"We were pleased to work with top-tier Italian institutions like MPS and IntesaSanPaolo to finance this facility and accomplish this significant milestone for our company in an overall challenging economic landscape in Europe,” Scheer notes. “The support of local institutions, coupled with the commitments of local government agencies, underscores Italy's dedication to job creation, clean technology, the environment and the potential benefits that Cereplast can bring to the region."

Cereplast estimates the total cost of the purchase and refurbishment of the facility will be about 12 million euros (US$17 million). The company intends to build a 125,000-square-foot plant with capacity of about 100,000 tons, which is expected to be completed in two phases. The first phase will allow for a 50,000-ton capacity with manufacturing expected to begin by the fourth quarter of 2012. The second phase is expected to be completed based on market demand.