Cereplast Inc., the Hawthorne-based maker of biodegradable plastic substitutes, said Monday that it has prepared its new out-of-state factory for production to start in the coming weeks.
Cereplast also said it is concentrating "all core manufacturing assets" at the new facility, in Seymour, Ind., where the company has begun to hire staff.
The new factory means that the company's Hawthorne production site eventually will be phased out, although research and development and other small-scale production tasks may continue in the South Bay, said Randy Woelfel, Cereplast's president and chief operating officer.
About 20 of Cereplast's roughly 55 Hawthorne employees work in production. It is unclear how many of that production staff would lose their jobs since there is overlap in worker responsibilities that also include maintenance and quality control, Woelfel said.
Cereplast has no plans to move its Hawthorne headquarters, which includes top executives, administration and sales.
"We will be concentrating out manufacturing activities in Seymour, Ind., but otherwise the other activities and leadership will remain here in Hawthorne," Woelfel said.
Even after closing local production operations, the company plans to keep its more than 23,000 square feet of space at its two adjacent Hawthorne buildings in case of future growth.
"We're in a very rapid growth mode and we have very large ambitions for the further development of the company," Woelfel said.
In addition, maintaining a Southern California presence keeps the company in Western U.S., "which is in the forefront of adopting bio-based products," he said.
It is unsurprising for a Southern California company to move its manufacturing elsewhere because of the Golden State's high business costs including workforce and utilities. However, Cereplast also was attracted to Indiana because of incentives offered by the state and county governments there, Woelfel said.
In addition, Seymour is much closer to the agriculture-based raw materials used to make its bio-based resins, which are environmentally-friendlier plastic substitutes. Seymour also is closer to Cereplast's customers, who form the resins into such products as disposable utensils, plates and cups.
The new Indiana factory is located on a 63-acre site large enough to accommodate expansion, with production of up to 500 million pounds of resin a year by as early as 2010, the company said.
Cereplast was founded in 2001. The company makes resins from renewable resources like corn and potato starch.
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