Cardia Bioplastics: New Supply Deal in China
Australian manufacturer of sustainable packaging products and resins, Cardia Bioplastics Limited, (ASX: CNN) has struck a major agreement with a bag manufacturing company based in China - its third such deal in three months.
The new agreement with the unnamed company, remaining anonymous for commercial sensitivity, will ensure that a minimum US$0.8m p.a. of Cardia Bioplastics products purchased by the Chinese bag company. These products will then be exported to the company's local and international client base.
This agreement follows on from a series of deals in China across different market segments recently announced to the ASX, and adds to the Cardia's growing international reputation. In the past quarter, Cardia has announced supply agreements with:
• Ben's Land - A US$1.5m annual agreement for nappy and feminine products
• Beifa Group - An agreement with China's largest pens and stationery supplier to manufacture pens from sustainable resins rather than traditional plastics.
Cardia also recently announced an agreement with Australian owned Nature Organics for the supply of its bioplastics resin technology for "bottles and closures" across a range of products.
Cardia's Chairman Mr. Pat Volpe said the recent deals demonstrated the momentum Cardia was gaining in the international marketplace, and also highlighted its broad product offerings using patented technology surrounding the use of bioplastics and sustainable resins.
He said the bag company was not being named to protect commercial sensitivities.
"These last four agreements cover nappy and feminine hygiene products, pens, bags, bottles and closures," Mr Volpe said.
"This demonstrates the vast potential for sustainable resins. Companies around the world are in need of internationally accredited, quality bioplastics.
"A substantial percentage of the world's plastics products are manufactured in China. The accelerated interest in bioplastics makes it logical that Cardia is receiving a great amount of interest from Chinese companies which have an established portfolio of international clients."
Mr Volpe said this US$0.8m minimum annual order contract was won because Cardia's compostable resins met stringent international compostability standards.
He noted that the range of renewable BiohybridTM and certified compostable resins was also creating "significant" interest in China where the company's manufacturing plant was located, as well as in other countries which are aggressively pursuing greener alternatives.
"Our bioplastics will be used in day to day consumer products including shopping bags but also in other finished consumer products."
"Cardia is working with several other companies at the retail consumer end as well as in new packaging products that are being developed."
"We are well positioned to expand and this supply agreement is further endorsement of that."
Mr Volpe said Cardia was getting close on other development projects, and if these were successfully commercialized, Cardia's sales numbers would "significantly increase".
About Cardia Bioplastics
Cardia Bioplastics Limited (ASX CODE: CNN), through its 100% owned subsidiary Cardia Bioplastics Australia Pty Ltd, develops, manufactures and markets its patented renewable resource based materials and finished products derived from Cardia's proprietary technology for the global packaging and plastic products industries. The company holds a strong patent portfolio and its growth is fuelled by the global trend towards sustainable packaging. Established in Australia in 2002 as Biograde, the company Headquarters and Global Applications Development Centre is in Melbourne, Australia. The Product Development Centre and manufacturing plant is in Nanjing, China. There are Cardia Bioplastics offices in the Americas, Europe and China, and a network of leading distributors across the Americas, Asia and Europe.