ADM end bioplastics joint venture with Metabolix

Archer Daniels Midland (ADM) have announced the termination of their Telles joint venture with Metabolix for polyhydroxyalkanoate (PHA) bioplastics.

Agribusiness giants ADM blamed uncertain financial returns on the unexpected decision to call time on the bioplastics joint venture between themselves and bioscience company Metabolix.

Under the joint venture, signed in July 2006, the two companies sold PHA-based bioplastics, including Mirel™, in the US, Europe and other countries.

Now the production of Mirel on behalf of Telles will come to an end and there are major doubts about the future of the 90 staff at ADM's newly constructed 110 million pound a year plant in Clinton, Iowa, where the polymer was produced.

"We have analyzed our business portfolio, identifying areas that are not delivering sufficient results now or are not expected to deliver sufficient results within a reasonable timeframe," said Mark Bemis, President of Corn at ADM.

"We have had a good working relationship with Metabolix, and the fermentation technology performed well at our facility. Unfortunately, uncertainty around projected capital and production costs, combined with the rate of market adoption, led to projected financial returns for ADM that are too uncertain. Therefore, we have decided to exit the business as permitted by the commercial alliance agreement with Metabolix," he added.

The decision comes following a strategic review of the company's priorities and resulted in ADM laying off 1000 jobs in a bid to cut costs. As for the future of the Clinton fermentation plant, ADM say they are evaluating other commercially viable uses for the site, but have yet to make any firm decision on alternative uses.

In response to the announcement Metabolix Chief Executive, Richard Eno, said: "Clearly, we are disappointed by ADM's decision to withdraw from Telles. While this is a setback, we remain committed to successfully commercialising PHA bioplastics. Over the past few years we have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model."

Metabolix is currently conducting its own strategic review of its business priorities for 2012. The company said they plan to continue to focus on the development of renewable industrial chemicals but will downsize their bioplastics operations.