Novamont and BioBag: a challenge to global bioplastics markets (by G. Lonardi)

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(by Giorgio Lonardi)

According to a Fortune Business Insight estimate, the global bioplastics market will grow impetuously in the coming years. Up to the point of jumping from 8 billion dollars in 2018 to 20 billion expected for 2026 thanks to an average annual growth that would touch 16%. The acceleration, therefore, will be strong. We need to start from these numbers to understand the meaning of the fresh acquisition of a company like the Norwegian BioBag by the Italian Novamont, one of the world leaders in the sector thanks to its 270 million turnover and 1,800 patents and patent applications submitted.

Within this scenario, Novamont must grow to keep pace with the market and play a leading role at an international level. Catia Bastioli, CEO of the Novara-based company, knows this well, revealing to Corriere that the company aims to “double its turnover in the next five years”. While the general manager Marco Fumagalli did not exclude other acquisitions “that allow us to exploit new opportunities”, adding that the listing on the stock exchange “is undoubtedly among the plans for the coming years”.

In this context, the acquisition of BioBag, 135 employees and 41 million in revenues, may seem like only a small step. It is not so. First, because the Norwegian company is present not only in Europe but also in the United States and Australia where the Italians are less strong. Not to mention that the two companies are complementary, collaborating with each other in the same sector for 25 years without overlapping. A well-established partnership, therefore, which for this very reason can open up new opportunities.

Novamont’s core business is the production of Mater-Bi, the compostable raw material of vegetable origin used for wet bags in Italy and in other countries. The Novara-based company also has a unique know-how in bioplastic plant engineering. This is confirmed, for example, by the rescue and restructuring of the Botrigghe (Rovigo) plant: decommissioned by the Japanese Ajinomoto group that produced lysine (an amino acid for the pharmaceutical and food industry), it was transformed into a plant for bio-butanediol , used to give flexibility to Mater-Bi. And other similar operations certify this, such as the transformation of the Pet factory of the bankrupt Mossi & Ghisolfi in that of Patrica (Frosinone) into a complex for Origo-Bi, also an intermediate compound of Mater-Bi.

On the contrary, BioBag, a family-controlled company based in Askim in Norway, is located downstream of the supply chain. This means that it directly produces compostable bags for the Scandinavian and Eastern European markets where it has a small factory in Estonia. Yet the point is another. In fact, Novamont does not want to compete with its customers to whom it supplies the raw material for the production of the bags themselves. What interests Novara, in fact, is the know-how gained by the Scandinavians in marketing, in the distribution of products for separate collection, mostly supplied by Italian companies, in addition to the e-commerce portal present in the USA.

In short, by combining the skills of the two companies, the group born from the acquisition can present itself on the market as a global partner capable of providing communities and local authorities in Europe, North America and Australia with everything needed to manage them correctly and advanced separate collection. Also because Novamont is not just a company, but the “director” of a chain of companies made in Italy that aims to solve any problem from the production of compostable eco packaging to the circular bioeconomy that uses fruit waste to obtain biogas and then biomethane.