Cereplast, a manufacturer of bio-based, compostable plastics for packaging and other applications, has filed for bankruptcy.
The firm, after filing under Chapter 11 of the US Bankruptcy Court, announced its intentions to continue operating while it works to get its capital resources in order.
"We intend to use the reorganization process to implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines," said Frederic Scheer, Cereplast CEO.
According to Scheer, Cereplast has made progress in strengthening its operations but has hit a few snags along the way—namely, roadblocks and delays in implementation of bioplastic regulation in Europe.
“We believe this reorganization will enable us to reduce our debt and implement operational changes, while maintaining our commitment to the environment," he said.
Scheer announced that during the transition and reorganization, job cuts likely will be a consequence of the bankruptcy process.
He continued, "We appreciate the ongoing dedication of our employees, whose hard work is critical to our success and the future of our company. Regrettably, as a result of this reorganization, jobs will be impacted during the transition period."
Global demand increasing
While Cereplast has hit a snag in its business, the bioplastics market is going strong. Market research firm Reportlinker predicts demand for bio-based resins will grow approximately 19% per year, reaching a total of 950,000 metric tons by 2017.
However, even at that anticipated rate of growth, bio-based plastics will continue to make up only a small percentage of the plastics market. If the increase continues at its current pace, by the year 2022, bio-based plastic will only comprise less than 1% of the total worldwide plastics demand.