BASF partner Avantium in IPO to fund plastics from plants -sources

By Ludwig Burger and Arno Schuetze

FRANKFURT, Oct (Shenzhen: 000069.SZ - news) 12 (Reuters) - Dutch chemical technology firm Avantium plans to announce an initial public offering (IPO) this week to fund commercial production of plant-based plastics for Coca Cola (NYSE: KO - news) bottles and Danone (LSE: 0KFX.L - news) yoghurt cups, two people familiar with the plan told Reuters.

Avantium - which counts Dutch bank ING, Coca Cola, Danone and various venture capital firms among its owners - plans to raise more than 100 million euros ($112 million) from new shares, valuing the group at up to 300 million euros after the transaction, said one of the sources who asked not to be named.

Avantium and German chemicals giant BASF last week unveiled plans to set up a joint venture and build a production facility for a medium triple-digit million-euro amount to produce chemical building blocks from plant-based sugars.

The proceeds from the IPO, to be managed by ING and KBC , are earmarked to foot Avantium's part of the bill, the sources said.

Avantium and ING declined to comment. KBC was not immediately available to comment.

Spun off from Royal Dutch Shell (Xetra: A0ET6Q - news) in 2000, Avantium has developed a chemical production procedure that feeds on fructose from plants rather than conventional oil derivatives.

This yields a chemical building block called furandicarboxylic acid (FDCA), which can be further processed into a type of plastic that is more robust than the widely used PET for bottles.

Apart from food packaging, the bioplastic is also usable for textiles, electronic and automotive components.

Analysts say that many consumers prefer renewable-labeled packaging but are prepared to pay only slightly more than the price of petroleum-based equivalents.

The cost of production has been a major hurdle to renewable plastics becoming mainstream but Avantium claims its method is cost-competitive.

Developers of renewable plastics have long focused on genetically engineered microbes that can ferment carbohydrates from plants into chemical building blocks but non-biologic approaches based on catalysts that enable chemical reactions, such as the one used by Avantium, have also gained traction. ($1 = 0.8928 euros) (Additional reporting by Toby Sterling in Amsterdam; Editing by Georgina Prodhan)