Furniture, Appliances & Consumer Goods Joint Venture & Partnerships

NESTE and IKEA Take Leadership in Bio-based Home Furniture

NESTE and IKEA join forces to industrialize and lead the trend of renewable bio-based materials for home furnishing plastic products.

Il Bioeconomista and other specialized publications relayed that Neste (Finland) and Ikea (Sweden) announced on September 7, 2016 a partnership to deliver renewable, bio-based plastics. The two Scandinavian companies plan to join forces to take leadership in renewable bio-based materials, and invite other companies to jump on the bandwagon of the initiative.

The partnership reportedly includes the production of plastics and other materials utilizing Neste’s renewable solutions in polymer production.The partnership combines IKEA’s commitment to reduce their dependence on virgin fossil based materials and Neste’s expertise in renewable solutions.

IKEA made a clear presentation of their commitment during the 10th European Bioplastics Conference in Berlin in November 2015 as follows.

IKEA wants to have a positive impact on people and planet, which includes taking a lead in turning waste into resources, developing reverse material flows for waste materials and ensuring key parts of IKEA’s range are easily recycled. IKEA’s long-term ambition is for the plastic material used in their home furnishing products to be renewable or recycled material. The company is starting with their home furnishing plastic products, representing about 40% of the total plastic volume used in the IKEA range.

The PR announcing the partnership with NESTE repeats this commitment :

“IKEA wants to contribute to a transformational change in the industry and to the development of plastics made from recycled or renewable sources. In line with our goals, we are moving away from virgin fossil-based plastic materials in favor of plastic produced from more sustainable recycled or renewable sources such as waste and residues, not using palm oil and it’s derivatives as feedstock”, says Lena Pripp-Kovac, Sustainability Manager, at IKEA of Sweden.

“We believe that working with Neste will open up an important pathway towards industrializing the production of plastics from more sustainable feedstock”, says Camilla Rööst, Material and Innovation Development Manager, at IKEA.

Whilst IKEA’s pledge makes sense and seems to be an obvious fit with its strategy and imagen the choice of NESTE as key partner was more surprising to me. NESTE has expertise in the field of renewable chemicals like bio-fuel, bio-lubricants solvents and jet-fuels. I had no memory of them in the field of bio-based and bio-degradable plastics. A visit to their web site to update my information tends to confirm my first view: Data sheets reflecting the existing commercial product range does not mention a single bioplastic or even a monomer that could lead to a bio-polymer. So I am still puzzled by the choice and have some doubt it would bear tangible fruit in the short term. The alliance might be for IKEA to assign NESTE the role of channeling a collaborative work with bio-polymer and ready-to-use bio-plastics producers. Hence the call for more partners to join: “The companies invite others to join the initiative. Neste and IKEA’s target is to produce the first proof-of-concept during 2017.”

.What is the added value of such and additional link in the value chain? Future will bring an answer. My understanding was that IKEA was both big and international enough to deal directly with the most advanced and or biggest players globally without needing a technical and supply chain broker. But the partnership might contain something which is not made public and actually brings value to both partners. At this stage it is an unknown to me. If you, my dear reader, have a clue, please let me know.

NESTE on their side stated:

“We are very pleased to form a partnership with IKEA. IKEA’s commitment to initiate a change in the industry is an extremely important step in redefining how materials will be made and how raw materials are used in the near future. IKEA and Neste, together with partners, can enable the production of bio-based plastics that are produced from waste and residues of the customers’ preference and choice, can be produced with the existing production assets, are fully compatible with customers’ needs, and are recyclable in the current plastics pool. We are proud to work with IKEA on the initiative”, says Tuomas Hyyryläinen, SVP, Strategy and New Ventures at Neste.

Does it bring more light to the value created by the deal? Not to me.

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