EarthShell lands its 1st paying job

Pact with Interior began as a pilot project 2 years ago

Biodegradable bowls

McDonald's contract, in early stages, not generating revenue

March 06, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

A small philodendron growing in a display case at the Department of the Interior's cafeteria is a sign of good things to come for EarthShell Corp.

The plant is thriving in compost made from diners' discarded meals, including EarthShell's biodegradable bowls, which were made in Owings Mills. What began as a pilot project two years ago to supply the environmentally helpful dinnerware to the agency has become EarthShell's first revenue-generating contract.

The company, based in Santa Barbara, Calif., has a contract to supply McDonald's Corp. with biodegradable Big Mac containers, but that project is in the early stages and is not generating revenue.

FOR THE RECORD - A headline in Tuesday's Business section incorrectly stated that the Department of the Interior was EarthShell Corp.'s first paying customer. The article failed to mention that the contract was for both bowls and plates. The Sun regrets the errors.

Terms of the new contract were not disclosed.

"This is our first commercial customer," Donna Balinkie, EarthShell's director of marketing at the company's Lutherville satellite office, said yesterday. "We think it's very significant to our business."

Bowls for the Interior Department and Big Mac packages are manufactured under an operating agreement with Sweetheart Cup Co. Inc. One section of the Owings Mills plant has been set aside for production of EarthShell's products by EarthShell employees. The work will shift to Sweetheart employees once the plant is operating at "near design capacity," which is about 600 million containers a year, Balinkie said. EarthShell has produced about 7 million containers.

Ken Naser, team leader of solid and hazardous materials management at the Interior Department, said the agency has been looking for ways to improve its recycling.

"We've been very happy with [EarthShell's products]," he said. "It looks good and performs well, so from an environmental perspective I'm very pleased."

The discarded EarthShell products, along with food and other biodegradable paper products, were trucked from the Interior Department, about two blocks from the White House, to an Agriculture Department research facility in Beltsville, where the material was mixed with leaves and grass and converted into compost.

Some of the compost was used to grow seedlings - including the philodendron in the agency's cafeteria - to demonstrate the biodegradable aspects of the dinnerware.

Naser said that the Clinton administration issued an executive order asking agencies to look for ways to recycle but that it was not required and that the move was initiated by the Interior Department.

"We would like to think that [other agencies] would follow," Naser said.

EarthShell has yet to post any revenue - cash generated from the McDonald's contract is booked as an offset to manufacturing costs - and it lost $10.2 million in the third quarter. Fourth-quarter figures have not been released.

The company's shares, which were trading as high as $23 in March 1998 when it went public, closed up 25 cents yesterday at $1.56.

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