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Local firm in pact to turn corn to plastic

Metabolix teams up with Illinois agribusiness giant

Plastic made from corn could soon be widely available, the result of a joint venture signed yesterday between a small Cambridge company with MIT roots and Archer Daniels Midland Co., the multibillion-dollar agribusiness.

Metabolix Inc. and ADM, of Decatur, Ill., will build a giant production facility costing as much as $100 million to turn corn into plastic. The production plant, likely to be located somewhere in the Midwest, could produce plastics used for everything from coatings on paper cups to molded materials used in patio chairs. Conventional plastic is petroleum based.

Jim Barber, president and chief executive of Metabolix, said the deal with ADM is a greater endorsement of his firm's technology than when a large pharmaceutical company licenses a drug from a start-up biotechnology firm. ''In our case, the technology is ready to go," he said. ''Often times in pharmaceuticals, the firms are still years away from a real product."

Though specific terms of the deal were not disclosed, the companies said ADM will provide funding for the factory and will receive most of the revenues from initial sales to repay the investment. During that period, Metabolix will receive undisclosed royalties. Afterward, the two firms will share equally in revenues from the joint venture, which hasn't yet been named.

Metabolix also will receive an unspecified up-front payment and milestone payments as it works to perfect its fermentation techniques for industrial-scale production.

''Together, we will move forward to produce renewable, widespread polymers at a cost which will allow their widespread incorporation into consumer products," G. Allen Andreas, chairman and chief executive of ADM, said in a statement.

To make plastic from corn, kernels are soaked and ground to release starch. The starch is converted into dextrose, a sugar, which is fermented using bacteria to produce lactic acid.

As water is removed from the lactic acid, the molecules form polymers, which become the basis for a variety of plastics.

''This deal is huge," said Steven McCarthy, professor and director of the Biodegradable Polymer Research Center at the University of Massachusetts at Lowell. Plastic ''produced by plants is going to be very cheap and renewable," McCarthy added. ''We won't have to rely on oil. It's biodegradable and recyclable."

McCarthy and UMass-Lowell have been working with Metabolix to develop processes to use the plant-based plastic in conventional plastic production machines.

The only factors keeping the bio-based plastics from reaching consumers, McCarthy said, are ''price, price, and price." With the large-scale manufacturing promised by the joint venture, ''this will definitely be competitive."

Metabolix was formed in 1993 by a group of academics from the Massachusetts Institute of Technology. The private firm has about 30 employees and does not disclose revenues or venture capital funding.

Archer Daniels Midland is a major agricultural processor making soy meal, soybean oil, ethanol, corn syrup and flour. It has about 26,000 employees and 250 processing plants. For the year ended June 30, it posted sales of $36.2 billion.

Jeffrey Krasner can be reached at krasner@globe.com.

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