Friday, January 13, 2012

Lowell bioplastics firm Telles closing; Metabolix to downsize

By Michelle Lang

Telles LLC, the Lowell-based joint venture between Cambridge bioplastics firm Metabolix Inc. and agri-giant Archer Daniels Midland Co. (ADM) is closing down, effective Feb. 8. As a result, Metabolix is planning to restructure its bioplastics business and downsize operations, with details being finalized.

ADM is backing out of the venture, it said in a news release, because of Telles’ “uncertain” projected financial returns.

The joint venture was created in 2006 by the two companies to commercialize PHA bioplastics, including Mirel and Mvera. The biodegradable materials, produced at an Iowa manufacturing plant, are designed as alternatives to petroleum-based plastics.

ADM said it will retain the Iowa plant, while Metabolix will retain exclusive intellectual property rights to its own technology used in the joint venture.

The Cambridge company appeared to be surprised and disappointed by ADM’s backing out of Telles, according to a conference call led by Metabolix CEO Richard Eno.

“Over the past few years, we now have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model,” Eno said in a statement.

In light of the dissolution of Telles, Metabolix said it plans to continue commercialization of its renewable industrial chemicals program; to retain a small business and launch team to pursue a new business model for the bioplastics business; and deliver on its $6 million Department of Energy grant.

“It is highly likely that we’ll not have an immediate economically viable supply source,” Eno said, due to the lack of availability of production scale capacity for industrial customers.

Metabolix expects a restructuring charge between $2 million and $3 million this year, though details of the restructuring are still being finalized.