NEC Pushes Plastics Made From Crops

The Japanese electronics maker says it's close to a bioplastics breakthrough. But can greener gadgets be good for earnings?

by Kenji Hall

Masatoshi Iji isn't a natural pitchman. So when the NEC (NIPNY) researcher offers a low-tech demonstration of how his "eco-plastic" is made, it's not all polish. Iji instructs an assistant to spoon fine wheat-colored fibers into a funnel. The fibers drop into a shoebox-sized oven, which then spits a gooey substance resembling toothpaste into a trough of water. Within seconds, the paste hardens into plastic.

Or at least something that looks and feels like plastic. The difference is that Iji's invention is made not from petrochemicals but almost entirely from corn and the hemp-like fibers of a kenaf plant. And unlike many plastics made from fossil fuels, Iji's bioplastic is biodegradable. "It depends on the product, but we can make it so it decomposes after seven or eight years," says the 51-year-old Iji.

As scientific breakthroughs go, bioplastics—or polymers made from crops and other natural sources—haven't lived up to the hype. Henry Ford, an early promoter, developed a way of producing car parts from soybeans but gave up when World War II broke out. And while other carmakers such as Toyota Motor (TM) and Mazda Motor (MZDAF) have dabbled with bioplastics, none has made anything but spare-tire covers and other noncore parts. Today, bioplastics remain a fraction of the $130 billion global plastics business and account for an estimated 5% or less of total annual plastics output. Much of that output is still used for short-use purposes, such as food packaging and disposable utensils.

The Materials Attraction

Still, NEC executives believe they are on the verge of a breakthrough. In many ways, their bet on bioplastics reflects an industry shift toward building greener gadgetry. These days every top tech manufacturer is investing in eco-friendly innovations. It's a reversal from the days when companies were under fire from environmentalists who raised the alarm about toxic junkyards filled with mounds of used computers, printers, and TVs. New recycling laws and bioplastics guidelines in Japan as well as tighter restrictions on toxic substances in Europe and other countries have forced companies to clean up their act.

NEC isn't the first Japanese tech company to use bioplastics in commercial products; that distinction belongs to Fujitsu (FJTSF) and Sony (SNE). (Matsushita Electric Industrial (MC), Toshiba (TOSBF), Ricoh (RICOF), and Fuji Xerox are not far behind.) Why even bother? After all, NEC isn't a materials maker. It specializes in networking equipment and consumer electronics and builds some of the world's speediest supercomputers. Recently, the $38 billion company has had enough other problems—flat profits, overdependence on its home market—that stretching itself even thinner doesn't seem like a solution.

But NEC is determined to carry on. By 2010, NEC predicts 10% of its products will contain bioplastics. So far NEC has used bioplastics sparingly—as an insert for an empty wireless-card port on laptops three years ago and for the outer shell of a cell phone last year. One reason: cost. It's at least twice as expensive to use bioplastics as traditional petroleum-based plastics.

Better Recycling Percentage

In the case of the cell phone, which NEC produced as a limited edition for wireless carrier NTT DoCoMo (DCM), the material inflated the price of each unit by "less than 10%," says Iji.