Agricultural processor Archer Daniels Midland (ADM, Decatur, Illinois / USA; www.adm.com) has decided to end its Telles bioplastics joint venture with bioscience company Metabolix (Cambridge, Massachusetts / USA; www.metabolix.com). Telles was created in 2006 to commercialise PHA-based bioplastics, branded “Mirel” and “Mvera”.

Metabolix said it is disappointed by ADM’s decision, and will now scale back its bioplastics business. “While this is a setback, we remain committed to successfully commercialising PHA bioplastics,” stated Metabolix CEO Richard Eno. “Over the past few years, we have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model."

Metabolix said it is now free to open discussions with alternative manufacturing and commercialisation partners for PHA bioplastics. The company plans to continue to focus on developing renewable industrial chemicals, and is conducting a strategic review of its business priorities for 2012.

ADM is exiting the joint venture because of concerns about the financial returns. “Unfortunately, uncertainty around projected capital and production costs, combined with the rate of market adoption, led to projected financial returns for ADM that are too uncertain,” said Mark Bemis, president of ADM’s corn business.

ADM announced its decision to exit Telles a day after it revealed plans to cut 1,000 jobs, or 3% of its workforce, amid investor discontent about the returns on its capital expenditures in recent years. Production of Mirel at ADM’s corn processing facility in Clinton, Iowa / USA on behalf of Telles will end. ADM will retain the manufacturing plant and Metabolix will retain all its technology used in the venture. Under the terms of their commercial alliance, ADM may provide PHA fermentation services for Metabolix during a three-year period following termination.

ADM has approximately 90 employees at the Clinton polymer plant, plus a small number of employees supporting the Telles sales and marketing efforts in Europe. The company said it is evaluating the impact of the closure on staffing and considering other commercial uses for the Clinton fermentation assets.