Lawrence Den Hartog describes himself as a pretty conservative small business owner. But the idea of making plastic containers from corn has captured this Grinnell manufacturer’s imagination. His company, Sho-Me Container, is about six months away from becoming what he believes will be the Iowa manufacturer to produce containers made entirely from corn.

“I really think this is going to go, or I wouldn’t be spending the money I’m spending,” said Den Hartog, whose factory will begin installing about $1 million in new equipment within the next couple of months.

At the same time, Naturally Iowa LLC, a consortium of southwest Iowa dairy farmers, plans to begin bottling its milk next month in containers made from the same type of corn-based plastic. Its CEO, Bill Horner, said it will be the first dairy in the world to do so.

The raw material for the innovative packaging material, known as polylactic acid, or PLA, is made by Minnesota-based NatureWorks PLA. Originally formed as Cargill-Dow, a joint venture between Cargill Inc. and Dow Chemical Co., NatureWorks, opened a $300 million plant in Blair, Neb., in 2002 that has the capacity to turn out 300 million pounds a year of the corn-based polymer. The company essentially harvests the carbon stored in the sugar within the corn to make the polymer, which when molded looks and feels like ordinary plastic.

Though food companies and grocers have been slow to adopt the new product, whose performance characteristics are relatively unknown compared with oil-based plastics, skyrocketing petroleum prices are fueling a second look at the product.

Additionally, natural foods companies, among them Naturally Iowa, view the environmentally friendly PLA as a way to generate additional interest and loyalty from their “green” customer base. A recent Michigan State University study indicated that 82 pounds of corn can replace 55 pounds of oil in making 1,000 16-ounce plastic bottles. Additionally, PLA requires 36 percent less energy from fossil fuels and produces 44 percent less carbon dioxide, even after factoring in the fuel and fertilizer used to grow the corn.

And unlike oil-based plastic bottles, PLA bottles can be broken down by the heat and moisture generated in commercial composting facilities to return them to the soil. PLA is also designated as a recyclable plastic with its own recycling category number, No. 7.

From a manufacturer’s perspective, raw material costs are an important consideration, Den Hartog said.

“This resin was higher priced than what PET (the petroleum-based resin) was,” he said. “Now, PET is about 15 cents a pound higher than what the corn product is. Consequently, we’ll be able to switch over from a lot of PET bottles, and be able to make them cheaper. This is all due to the fact that oil is over $44 a barrel. If it stays above $44, that’s about the breakeven point.”

To contend with rising transportation costs, Sho-Me Container plans to move some of its existing equipment to a 50,000-square-foot plant it’s building near Las Vegas, Nev., which will free up space in its 86,000-square-foot Grinnell factory for the new equipment to make the PLA containers.

“We wanted to be as close to California as we could be without actually being in California,” Den Hartog said, because of the high cost of doing business in that state. “Our biggest customers are in Los Angeles, so it seemed like the most logical place to be.” The Nevada plant will employ about 20 people.

Den Hartog said PLA’s biggest draw lies within the nutritional and organic foods industries because of the tie-in with those natural products. The company’s existing customer base is primarily nutritional supplement companies that order its wide-mouthed plastic containers for products such as powdered drink mixes. He’s talking with companies as far away as California, as well as in Iowa, about using the PLA packaging, he said.

Meanwhile, Naturally Iowa has been testing PLA containers for dairy use through Iowa State University’s commercialization assistance program, and is ready to begin using them at its Clarinda plant next month, said Horner, a Red Oak farmer and Naturally Iowa’s CEO.

“We’re still in the testing stages for the yogurt at the ISU testing laboratories, to satisfy ourselves that we have just the right ingredients and container for them,” he said. “Ice cream comes in third place in the sequence of testing and production. So it’s in the near future.”

Naturally Iowa has had samples of various-sized containers made for it by Sho-Me Container, though Horner said the company is still evaluating its sourcing for the containers, which it may decide to manufacture in-house at its Clarinda plant.

“Transportation costs are a major cost in getting the bottles,” he said. “We do have room in our facility to house such a plant. So all of those ideas rule favorably in the direction of local production. The closer we can get raw materials to our plant, the better, and the closer we can get packaging to our plant, the better. It just makes common sense to work toward that goal, and that’s what we’re doing.”

At the same time, NatureWorks is evaluating where it should locate its next manufacturing plant to continue to provide a global source for PLA.

“We understand that this is not a one-plant item,” said Brian Glasbrenner, business development manager for NatureWorks, which is based in Minnetonka, Minn. “Of course, you don’t build a second plant until you have a product established for the first plant,” he said. “The question is, where do you put a plant for a global product? Do you put it in Asia, where much of your demand is, or do you put it in the Midwest, where your sugar source is. Both of those are important factors.”