Area Company Has Right Stuff for Pen Contract

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An El Segundo maker of bio-based plastics has agreed to supply its resin to the manufacturer of one of the world’s first biodegradable pens.

Cereplast Inc. says it inked a deal with S.R. Promocionais Ltda., based in Sao Paulo, Brazil, to make organic resin for that company’s new Eko BIO pen. Resin in the raw material from which plastic is made.

The pen, which is supposed to look and perform like a standard ballpoint, has been available in Brazil and South America since June and is expected to start showing up on store shelves in the United States in the fall.

Resin produced at Cereplast’s facility in Seymour, Ind., is made from corn, wheat, tapioca and potato starches instead of a petroleum base. As a result, it is biodegradable, reverting back to its natural elements at a compost center in less than six months.

“It looks like a traditional pen and you will not be able to tell the difference,” said Frederick Scheer, the company’s chief executive. “It’s the first pen of its kind made from our product.”

The plastic components manufactured from Cereplast’s resin are used for the pen’s packaging, cap and body. The ball and ink case are made from tungsten, while the ink is nontoxic and supplied by an Italian company.

The deal isn’t a big one for Cereplast, which has said it has entered into agreements to ship 16 million pounds of resin in 2010 to a customer base that includes the maker of Solo disposable cups and Dorel Juvenile, a Canadian maker of infant products.

Scheer estimates the S.R. Promocionais agreement will only add “a few thousand pounds of resin” to the company’s production base, but he said he’s excited about the deal, which should provide good marketing opportunities.

“In a couple of weeks, I should have 5,000 or 6,000 (pens) in my office,” he said.

The deal comes on the heels of a tough 2009 for Cereplast, which saw sales fall 50 percent amid the recession, forcing it to lay off 45 of its 70 workers. The first quarter wasn’t much better. The company trimmed its losses by a few hundred thousand dollars but the red ink still totaled $1.69 million.

The company attributed the decline to the fact that it had moved manufacturing operations from California to Indiana, forcing operations to be temporarily suspended. But big investors still seem interested in the company.

Cereplast has raised more than $13 million in equity capital from qualified institutions and accredited investors in the last 12 months. And three months ago, the company jumped from the bulletin boards to the Nasdaq Capital Market.

However, its shares are still taking a beating, closing at $3.25 on July 15, off more than half since early in the year.

Making It

A Torrance distributor of probiotic drinks has decided to go into the business of manufacturing the beverage, which is said to improve the health of the digestive tract.

Yakult U.S.A. Inc., a subsidiary of Tokyo-based Yakult Honsha Co. Ltd., has announced that it will open its first North American factory by 2012 to serve growing markets in Los Angeles and the United States.

The new 387,000-square-foot factory in Fountain Valley, just outside Los Angeles County, will produce about 250,000 bottles of the drink per day, with the capacity to produce as many as 760,000 bottles, company officials said.

“We are looking forward to the completion of the Yakult California factory since it will allow us to provide our product to more and more people across the country,” said Executive Vice President Teruo Tabuchi in a statement. “In the heart of Orange County, Fountain Valley is ideal because it is in close proximity to Los Angeles, which is our biggest market now.”

Yakult currently distributes in California, Nevada, Arizona, Texas, Colorado and New Mexico. Created by a Japanese microbiologist in 1935, probiotics is a milky drink made by fermenting a mixture of skimmed milk with a special strain of bacteria.

First introduced to the U.S. general market in 2007, the popularity of the drink has steadily grown with about 90,000 bottles being consumed daily in 2009.

Fanning Flames

Cal Flame, a Pomona manufacturer of high-end barbecues, grills and fireplaces, has become the principal donor to the Garden Project, a community garden built for homeless people in downtown Los Angeles.

The project, created by the Weingart Center Association, a non-profit that helps homeless men and women, consists of an open space upgraded to a park for the homeless people of Skid Row.

Cal Flame is owned by Lloyds Material Supply Co. Inc., which also makes the Cal Spas line of outdoor furniture. Donated were a modified outdoor burner, stainless steel refrigerator and two 30-inch steel doors worth a total of about $1,800.

“We wanted to create a peaceful sanctuary in Skid Row to provide the homeless with the healing power of nature to assist them in transforming their lives,” said Courtney Salas, the company’s public relations manager.

Staff Reporter David Haldane can be reached at dhaldane@labusinessjournal .com or at 323-549-5225, ext. 225.

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