ADM to end US bioplastics alliance with Metabolix
US-based bioscience firm Metabolix announced Thursday that Archer Daniels Midland (ADM) has given a termination notice for its role in the companies’ Telles joint venture for PHA bioplastics.
The effective date of the termination will be February 8, 2012, Metabolix officials said.
Telles was established as a sales and marketing commercial alliance between Metabolix and ADM in July 2006.
The joint venture sells PHA-based bioplastics, including Mirel and Mvera, in the US, Europe and other countries.
ADM recently undertook a strategic review of its business investments and activities and made the decision, it said.
As the basis for the decision, ADM indicated that the projected financial returns from the alliance were too uncertain.
After the termination, ADM will retain its manufacturing plant in Clinton, Iowa, that has been producing Mirel resins for Telles, officials said.
All Metabolix technology that was used in the joint venture, including intellectual property rights, will revert solely to Metabolix.
In addition, Metabolix will have no ongoing obligation under the ledger account which was funded by ADM to finance the Clinton plant and certain Telles operating costs.
“Clearly, we are disappointed by ADM’s decision to withdraw from Telles,” said Richard Eno, CEO of Metabolix. “While this is a setback, we remain committed to successfully commercializing PHA bioplastics.
“Over the past few years, we now have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model,” Eno continued. “We will be evaluating alternate plans for commercialization and clearly wish to supply this growing market in the future.”
Metabolix is currently conducting a strategic review of its business priorities and plans for 2012, it said.
The company plans to continue focus on development of renewable industrial chemicals and noted that it has continued to make good forward progress and remains in ongoing discussions with potential partners.
In light of the Telles termination, Metabolix plans to retain a core team in its bioplastics group to provide continuity with the technology and market, it said.
Due to the termination of the agreement with ADM, Metabolix said it is now free to open discussions with alternative manufacturing and commercialization partners for PHA bioplastics.
Meanwhile, ADM said that it will record a one-time pretax charge in its second quarter of between $300 million and $360 million, primarily for impairment of the related production assets.
ADM anticipates the cash portion of the total charge to be less than $5 million.
Comments