PURAC SEEKS IMPORT TAX WAIVER FOR LACTIC ACID PLANT

Bangkok Post - 17 January 2012

The Netherlands-based Purac, part of the global bakery products and lactic acid derivatives group CSM, asked the Industry Ministry to waive import taxes for chemical raw materials for its production plant in Rayong.

Processed agriculture is a top priority for the Board of Investment (BoI) this year.

Thailand has a lot of raw material such as sugarcane and cassava, which are used to produce lactic acid and then converted to lactide before being used as plastic pellets.

Industry Minister Wannarat Channukul said in the past certain new industries that did not have raw materials received import tax waivers from the BoI.

Purac's two projects worth around 10 billion baht are supported by the BoI and located in the Asia Industrial Estate in Rayong province. The plants produce 140,000 tonnes of lactic acid per year, which is converted into over 100,000 tonnes of lactide.

Purac is the only producer of lactic acid in Thailand, with 97% exported.

Mr Wannarat said the imports will increase production, resulting in increased use of Thai raw materials.

"I told the investors to submit an official letter," he said, which will then be submitted to the cabinet before being considered by the BoI.

Stephan Pauuwe, president and CEO of Purac (Thailand), declined to comment on the investment.

Purac opened talks early last year with Thailand's Indorama Ventures (IVL) about the possibility of building a polylactic acid (PLA) plant in Thailand with annual capacity of up to 100,000 tonnes.

PLA is a biodegradable alternative to petroleum-based polymers and would be free of genetically modified organisms (GMO). That makes it a green alternative to packaging materials, fibre and non-woven textiles.

A PLA manufacturing plant, with an unknown investment cost, would have an initial capacity of 10,000 tonnes a year, expandable to 100,000 tonnes annually after specific grades of applications are developed, SET-listed IVL said earlier.

Lactide monomers for PLA production would be sourced from Purac's plant in Rayong and other sites. PLA would be marketed by IVL through its existing marketing and sales network globally.