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China-based packaging firm Biopack Environmental Solutions has begun talks with government officials to expand its production capacity, hoping the economy of scale and increasing sales will cover its currently lacklustre balance sheet.

Biopack manufactures biodegradable packaging for the fresh produce industry using sugar cane waste. The company’s products are primarily marketed in Europe under the Roots Biopack moniker, reported Sumfolio.

The company announced on Monday it was in discussions with local Chinese officials to expand its production with a new factory in the southern Guangdong province.

Biopack hopes the new factory will bring economies of scale and future growth opportunities, it said in a press release.

“As Biopack grows and develops, we are keenly aware of the need to look ahead in our production planning,” said the company’s CEO Gerald Lau.

“We could realise tremendous cost savings and have the ability to plan for even higher production levels and significant growth. This is a truly exciting opportunity.”

Savings and growth are two things the company needs; Biopack’s net loss hit US$208,786 in the nine months ending 30 September 2009.

The company also has a working capital deficit of US$3,385,410, the Sumfolio report said.

The majority of those losses came from the company’s move from an external supplier to in-house manufacturing, however, and Biopack’s sales increased 25.6 per cent over the nine-month period with orders coming in from the European fruit season.

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