A Minnesota company that makes plastic packaging from plants rather than oil said Tuesday that it has signed a deal with a giant paper company in India to develop products for that country's booming consumer market.
Northern Technologies International, based in Circle Pines, said it will sell corn-based resins for plastic coatings and packaging to ITC Ltd., a conglomerate based in Kolkata, India, whose paper products division had $769 million in sales for the 12 months through March.
Executives did not put a price tag on the deal, but said it will be worth millions to the Minnesota company, whose engineers will help ITC develop new biodegradable and compostable bioplastic packaging for food, personal care products and other consumer goods.
Some of the new packaging developed for the Indian market could be introduced into the U.S. market, said Vineet Dalal, vice president and director of global marketing for Northern Technologies International.
"Given their know-how in the paper business and our knowledge and proprietary technology in the biopolymer business, it will lead to some interesting products that we will bring to the U.S.," Dalal said in an interview.
The deal follows an announcement in March that Northern Technologies International had signed an agreement with an Italian company to distribute the Minnesota company's Natur-Tec products in Italy. Natur-Tec is a line of bioplastics, including biodegradable bags for waste disposal.
The governments of India and Italy have imposed bans on some kinds of non-biodegradable packaging. India's is focused on packaging used in high volume, triggering demand for alternatives that don't have environmental and waste-disposal issues, the company said in a statement.
India's growing middle class also is buying more consumer goods, creating a $2.8 billion market for packaging that is expected to grow at least 14 percent annually in the foreseeable future, the company said.
For its bioplastics, Dalal said, Northern Technologies International uses corn-based resins developed by NatureWorks, a unit of Minnetonka-based Cargill Inc. He said the resins are modified by his company, which has developed various products based on them.
Dalal said the company already has begun selling resins to ITC and will expand the venture over the next six to 12 months.
Northern Technologies International stock closed at $16.01, down 3 cents, on Tuesday.
David Shaffer • 612-673-7090
