Natureworks: Market Development for Bioplastics

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Case Details:

Case Code : MKTG169
Case Length : 23 Pages
Period : 1997-2007
Pub Date : 2007
Teaching Note :Not Available
Organization : NatureWorks
Industry : Chemicals and Petrochemicals
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

One was the rapid increase in petroleum prices and the consequent rise in prices of petro-based plastics (the main substitutes for PLA), and the other was the growing public demand for a ban against single-use plastic bags.

Though, by 2007, there was wide interest in PLA, the company faced some challenges as well. There were concerns about NatureWorks using genetically engineered (GE) corn produced by Cargill to manufacture PLA. NatureWorks was able to address this issue, to an extent, by offering non-GE corn-based PLA, which it sold at higher prices than the usual variety.

However, it continued to face criticism from environmentalists who argued that by aggressively marketing PLA, NatureWorks was in fact promoting genetic engineering. The company was also criticized for diverting a resource meant for human consumption to make plastics. Another, and potentially the most damaging, challenge came from recycling associations demanding a moratorium on the production of PLA because of the problems that PLA created for PET⁹ and HDPE¹⁰ recycling programs.

Background Note

Cargill was founded by William Wallace Cargill (W.W.) and his brother, Samuel Davis Cargill (Sam), in 1867 as a partnership firm, W.W. Cargill & Brother (WWC&B). The firm constructed a grain flathouse¹¹ and opened a lumberyard in Lime Springs, Iowa. In 1868, W.W. moved to Austin, Minnesota, where he acquired several flathouses. In 1875, W.W. moved his headquarters to La Crosse, Wisconsin. In 1884, while W.W. managed the operations at Wisconsin, a new entity called Cargill Brothers, based at Minneapolis and controlled by Sam, was established for the operations in Minnesota and the Dakotas.

Excerpts >>

9] PET or Polyethylene terephthalate is a thermoplastic polymer resin of the polyester family. It is used to make synthetic fiber, beverage bottles, food and other liquid containers, etc.

10] HDPE or High-density polyethylene is a thermoplastic made from petroleum. It is tough and resistant to several solvents. It is used to make piping systems, detergent containers, fuel tanks, milk cartons, etc.

11] Grain flathouses were single storied, warehouse-like buildings that were used to store grain horizontally.


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