Cereplast, Inc. announced this morning that the company has received financing from a European group of investors led by a major bank in Sweden. The company will use the funding to implement its new strategic plan to accelerate growth as well as finance manufacturing supply agreements for the company’s major customers.
“The additional capital allows us to move forward aggressively in a very challenging economic environment,” stated Frederic Scheer, Chairman and CEO of Cereplast. “This investor group clearly understands the rapidly growing market opportunity for bio-plastics and has endorsed our business model that leverages our proprietary product development capabilities and marketing strengths.”
“The new licensing structure has the potential to help Cereplast land contracts with large packaging companies, which require large quantities of resin in a short time,” commented Rene Nicolodi, senior sustainability analyst at Zuercher Kantonalbank (Zurich Cantonal Bank), which began looking at Cereplast two years ago as a potential investment from a sustainability perspective.
“It’s quite important to note that their business plan or model until very recently was to ramp up their own production facilities for a variety of products, and that’s capital intensive, so it’s a challenging thing to achieve,” Nicolodi added. “The change in the business model to license out the production to the clients makes sense from my point of view.”