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Cereplast Provides Business and Sales Update; Sales Growth in Line with 2008 Plan
July 20, 2008
4 Min Read
HAWTHORNE, Calif.Cereplast, Inc. (OTCBB:CERP), manufacturer of proprietary, bio-based, sustainable plastics, today reported preliminary sales results for the three months and six months ended June 30, 2008.
For the second quarter of 2008, Cereplasts sales grew to $1,021,025, an 83-percent increase over the comparable quarter in 2007 and a 12-percent increase over the first quarter of 2008. For the first half of 2008, Cereplast sales grew to $1,934,177, a 104-percent increase over the comparable period of 2007.
We are very encouraged by the continuing expansion of our customer base, commented Frederic Scheer, chairman and CEO of Cereplast, and by the growth in established customer demand. The recent increased price of fossil fuel resins is significantly enhancing the competitiveness of our resins, making Cereplast resins a highly-viable economic alternative. Overall, commercialization of both our Compostables® and new Hybrid Resins® families has progressed right in line with our budget for the first half of the year. And our second half outlook is very strong, in line with our 2008 plan as well as projections of the industry analysts who follow Cereplast.
In the second quarter, as a key investment in its product commercialization capability, Cereplast began implementation of its first application development and resin testing laboratory in Hawthorne, California. When completed by the end of August, 2008, this facility will enable Cereplast to conduct all standard product development and qualification testing in-house, greatly speeding up the development cycle for new resin development and enhancing technical support to customers.
While I am pleased with the sales development in the past quarter, I am looking forward to the next six months for a very significant acceleration in Cereplasts sales volumes, said Randy Woelfel, Cereplasts president and COO. Several major projects are coming to fruition. Among the highlights for the past quarter are:
As of June 30, 2008, more than 120 companies have requested and been provided with samples of Cereplast bioplastic resin for use in more than 112 different product applications. Most importantly, the number of commercialized products using Cereplast resin has grown to more than 85, a 27-percent increase from the first quarter 2008.
Canguru Embalagens, a leading Brazilian producer of packaging materials, will launch this month the first line of compostable food service products in Brazil under the brand Bio-Zanatta, representing a several million pound opportunity for Cereplast.
Two leading US based manufacturers of high quality, single use food service products for consumer and commercial markets will launch new lines of compostable products before year-end. Annualized sales volume for these new lines could be in the range of $3,000,000 to more than $5,000,000 within a year of launch.
Kelmar Creations is launching Ecotainable® compostable containers and packs for the horticulture market.
Dentek is commercializing a line of dental hygiene products based upon Cereplast Biopropylene®.
Cereplasts Nat-Ur division signed sourcing agreements with several major quick service restaurant chains in the second quarter, including Jack in the Box and Chipotle, representing multi-million pound opportunities.
Cutlery, cups and straws made from Cereplast resin were used at the ESPY awards in Los Angeles on July 16th. Sports events, festivals, and venues such as PNC Park in Pittsburg, which implemented compostable foodservice products in April, represent a significant opportunity for the Nat-Ur division.
Nat-Ur is also featured now in Sysco Corporations Green Catalogue as well as college campus lunchrooms such as the University of Washington
In addition to these significant projects for both our Compostables® and Hybrid Resins® lines, we are seeing substantial sales growth and forward projections from such well-established customers as: Pace Industries, Inc., makers of high quality extruded sheet for the print signage, gift and loyalty card, and horticultural tag markets; Genpak, whose Harvest Collection® was the first Cereplast Compostables® resin-based food service ware line to go to market; and CellOCore, makers of Cello-Green® biodegradable beverage straws. The combination of all these projects should make 2008 a year of continuing success for Cereplast, as previously forecasted.
Beyond 2008, Scheer added, our joint development agreements with such major market and brand leaders as: Group Danone - for the development of bio-based food packaging; and PSA Peugeot-Citroen Group - for the introduction of sustainable automotive bioplastics, will drive substantial upside growth for our business. Consumption of traditional petroleum based plastics by our various joint development agreement partners alone represents several hundred million pounds of potential for our materials over the next three years.
Supporting this triple-digit growth outlook for Cereplast are major investments in new capacity and enhanced operations. Cereplasts new Hybrid Resins® facility in Seymour, Indiana, with an initial capacity of 50 million pounds, remains on-track for start up in the third quarter of 2008. In parallel, a project is underway at the Hawthorne, California plant to enhance the operability and cost efficiency of the Compostables® manufacturing lines, also by the end of the third quarter of 2008.
Cereplast Compostables® and Cereplast Hybrids® resins are becoming a daily reality for major converters around the country, and Cereplast is starting to reap the rewards of several years of focused effort. This will translate in our future performance figures, concluded Woelfel.
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