Bluepha, winner of the Future Planet Award for SUSTAINABLE GROWTH, is pioneering a revolutionary cost-effective method for producing bioplastics. This week, FPB speaks with CEO Terance Teng LI about his firm’s latest technical advances and commercial progress as they transition from the lab to the factory floor.
Terance Teng LI, Bluepha Co-Founder and CEO
Biodegradable plastics made using PHAs (polyhydroxyalkanoates) are no secret. Their applications in specialised medical equipment such as sutures, bone plates and surgical mesh are well established. Yet they have never made a significant dent on the global plastic manufacturing industry, which now produces well over 300 million tonnes of the stuff each year.
In environmental terms, it’s little short of a disaster. Barely 10% of plastic waste is currently recycled, according to a variety of estimates; a significant proportion ends up in landfills, on giant rubbish heaps in some of the world’s poorest countries, and in oceans where it does serious damage to marine wildlife.
“The big problem for PHA has always been the cost of production – people have been unable reduce it far enough for commercialisation,” says Li. “The PHA business today is a very small one. But the technology we have developed is unique. We believe we’re near to our goal of solving this problem.”
Bluepha’s roots go back to earlier academic research in the labs of Tsinghua University. “I was doing a PhD in microbiology when my colleagues at the research institute and I developed the technology together,” recalls Li. “There was a student project in late 2014. Most of the founders were students at the time.” The nascent start-up attracted considerable attention, winning the ‘President’s Cup’ in 2015 and receiving valuable financial and practical support from Tsinghua’s incubator programme, X-lab. It wasn’t until October 2016 that Bluepha was officially established, with a small stake retained by Tsinghua in return for rights to the IP.
Still in its first proper year of operation, Bluepha’s number one priority has been a pilot production programme. “We found a partner in China; we got access to a small facility with instruments - a factory - and started to develop the process,” says Li. “Before that time, this unique microorganism had only been tested in the university lab. Those pilot tests went well: our predictions of the performance of the whole process were quite accurate. When we scale up, we have a good understanding of how much more cost-efficient we can make it.”
Within months, Li and his colleagues have secured customers in two different sectors and are already producing bioplastic for agricultural film products and packaging. Today they’re committed delivering more than 300 tonnes of raw materials to ten customers.
They have also established their own lab where they will seek to improve the microorganism’s performance, as well as conduct other research. “We need to spend lots of time developing our core technology. This will focus on the microorganism for PHA production right now, but it can also be used in other bio-products and that’s what I expect in the future.”
In a country with rather limited IP protection, merely licensing new technology out to other firms cannot be the basis of a viable business plan. As such, Bluepha must evolve to straddle two camps: part biotech firm, part materials company.
2017 has also brought the firm’s first financial investor: FreeS Fund, a Chinese venture capital firm. It marks a watershed moment in the transition from an academic mindset to a commercial one. “All the founders are academics, including my former PhD supervisor,” says Li. “This has probably been our biggest challenge: when we started we were thinking about strategy from a research point of view. We have been learning and transforming. We’ve brought new people into the team, including some with backgrounds in business and marketing. We have an advisory board with commercial expertise.”
With another financing round expected in the second half of 2017, Li has already given some thought to the types of investors he’d like to bring on board next. “I would ideally hope for investment from strategic partners in two areas: materials companies and biotech firms. Companies in those sectors would potentially have great resources for us. I’d also be very interested in investment from international companies, which is one reason why the Future Planet Awards were a good opportunity for us.
“The market for what we’re doing should be international, after all”
That may even be an understatement. To the judges of the Future Planet Awards, on the hunt for companies that could change the world,’ few candidates stood out more than this remarkable biotech innovator and its dynamic scientist-CEO.