EarthShell Corporation (OTCBB:ERTH), innovators of biodegradable food service packaging, and EarthShell Hidalgo S.A. de C.V. of Mexico (EarthShell Hidalgo), have signed a licensing agreement under which EarthShell Hidalgo will manufacture, distribute and sell EarthShell Packaging throughout Mexico.
EarthShell Corporation approved the formation of EarthShell Hidalgo by a group of business leaders in Mexico, led by Licenciado (Lic.) David Maczka, with expertise in manufacturing and introducing products into the Mexican and global textile market.
The terms of the agreement grant EarthShell Hidalgo a performance-based, exclusive contract for the Mexican marketplace. The agreement defines yearly capital commitments with specific capacity and revenue goals for each of the first five years. Early next year, EarthShell Hidalgo will issue a purchase order for an initial 8 manufacturing modules with production capacity of approximately 200 million units per year of EarthShell Packaging foam laminate products.
EarthShell Hidalgo's goal is to have 96 modules operating within 3 years. EarthShell Hidalgo is currently in discussions with equipment manufacturers and plans to begin commercial manufacturing operations as soon as possible during 2005. EarthShell Hidalgo has paid a $1 million technology fee to EarthShell Corporation. The technology fee will be credited against future royalties due to EarthShell Corporation from EarthShell Hidalgo.
EarthShell Hidalgo has begun construction on the first phase of a 150,000 square foot manufacturing facility located on a 25 acre parcel close to the capital city of Pachuca in the state of Hidalgo, Mexico. EarthShell Hidalgo plans to invest approximately $50 million dollars in completing a state-of-the-art manufacturing facility for EarthShell Packaging while creating new employment opportunities in the local market area.
The new manufacturing facility is strategically located near the greater Mexico City market, one of the world's fastest growing food service disposable packaging markets.
The facility will initially focus on manufacturing EarthShell plates and bowls, but will also be capable of producing future foam laminate products developed by EarthShell Corporation, such as hot beverage cups, noodle bowls, trays, containers and associated line extensions.
EarthShell Corporation is engaged in the licensing and commercialization of proprietary composite material technology – made primarily from natural limestone and starch from potatoes, wheat or corn – for the manufacture of foodservice disposable packaging, including cups, plates, bowls, hinged-lid containers, and sandwich wraps. EarthShell Packaging is designed to be cost and performance competitive compared to other foodservice packaging materials.
Earthshell's packaging biodegrades when exposed to moisture in nature, physically disintegrates in water when crushed or broken, and can be composted in a commercial facility or in your backyard.
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