|  The final stretch of the train ride from Chandigarh to Delhi was a depressing experience the last time I took it. Crawling through the Indian capital’s northern suburbs, the impression was not of an economic powerhouse in the making but of a country disappearing under a rising tide of blue plastic.
Until quite recently, the average Indian family’s mainly biodegradable rubbish would be thrown into the back yard to be eaten by animals or composted. It is treated with the same cavalier disregard today, but consisting largely of an almost indestructible oil derivative, it simply accumulates into ever bigger and more squalid piles. It has been estimated that a plastic bag takes 100 years to rot. The problem in Europe is no less urgent, but we’ve learned to hide the problem in landfill sites. UK consumers use eight billion shopping bags every year, resulting in 100,000 tonnes of waste. The government’s waste prevention programme, Wrap, says that this pile of squandered plastic tips the scales at the same weight as 70,000 cars. Enter Plantic, a Melbourne-based company that floated on London’s Alternative Investment Market (AIM) in May 2007 and has recently established a subsidiary in Germany to support ambitious European expansion plans. Plantic has perfected the modern-day alchemy of turning the humble corn-cob into plastic, developing a fully biodegradable, water-soluble, organic alternative to the traditional oil-based packaging that’s piling up in our streets and landfills. The raw material used – non-genetically-modified, high-amylose corn starch – is compostable, and the authorities in Europe, some of the toughest in the world, have certified the bags safe for disposal in water. Put one under the tap and it quite literally starts to melt away before your eyes. Founded in 2001, Plantic had early success with contracts to supply biodegradable packaging for customers such as Cadbury Schweppes, Nestlé and Lindt. At its recent maiden results announcement, it confirmed that it has struck a deal with UK retailer Marks & Spencer too. The significance of this latter deal is that Marks & Spencer is telling its suppliers to start using Plantic materials. Grant Dow, a 42-year-old mechanical engineer who joined Plantic last year as chief executive, sees enormous opportunity in Europe, where retailers, investors and especially consumers have already bought into the drive for a low-carbon economy. “This is a great time to be selling this in Europe because our story resonates with people here,” Dow says. “The awareness is playing into what we are trying to do.” Wisely, one of Dow’s early moves was to redirect Plantic away from making the actual packaging and towards supplying the raw product. The emphasis in the short run will be securing tie-ups with bigger partners to tap into their strengths in distribution. On the product front, a new “nano-composite” technology patent covers materials that Plantic believes will be tougher and better at keeping both gases and liquids fresh, and will have higher transparency. Plantic raised €30m from its AIM float in May, valuing the company at around €75m. Analysts expect profits in 2009, and Libertas Capital, which advised on the float, uses a discounted cash-flow model to arrive at a target valuation of twice the current level. Europe is the prize for now, but one day a small London-quoted Aussie company might even get India composting its rubbish once more. |