Amcor plc (AMCR) Earnings Call Transcript & Summary

Good morning, everyone, and good afternoon to some of you. Thanks for joining us on day 2 of our Global Ag & Materials Conference. It's a pleasure to co-host this first session with my longtime colleague, George Staphos. So George and I have for quite some time, had a lot of discussion on the whole sustainability of plastic. Generally, we -- it's something we talk about that starts with a petroleum-based product and moves through my sector in the chemical sector. The resins are produced and then is passed over to the packaging sector that George covers. And we've had a lot of dialogue about just the sustainability of that whole supply chain. About a year ago, George and I put out a primer on plastic sustainability, and the topic of this discussion today of bio-based plastic was not even included in that primer. That's amazing how much this topic has evolved. And so we have a panel here to focus in on PHA as a bio-based plastic. So just big picture here rather than being derived from a petroleum product. It's derived from a plant-based product. Thus, every carbon in this plastic was originally CO2 in the atmosphere. And thus, not only is it producible by bacteria but it's degradable by bacteria. So it's bio-based and it's biodegradable. So let me just briefly introduce our panel and then we'll get into it. So George is to the right of me on the screen. And then to his right is Phil Van Trump. Phil is Chief Technology Officer of Danimer Scientific. He has responsibility for R&D, product development and has been at Danimer for a long time and cut his teeth there in on -- at the bench -- developing bench scale and pilot scale processes with PHA. If we move down to the bottom left of the screen, we have Oli Peoples. Oli is a PhD in molecular biology. He's long had a focus on engineering metabolic pathways for industrial biotechnology, which is exactly what we're talking about today. He was a co-Founder of Metabolix decades ago and has been involved in PHA research and development for a long time. He was the Chief Science Officer at Metabolix. Metabolix then was transformed into Yield10 about 5 years ago and Oli became CEO of Yield10. Honestly, I have been very familiar with Yield10 for many years because they develop traits for crops. We had a discussion not that long ago that I just wanted to get caught up with them on their trait development package, and we spent the whole time talking about PHA. So I didn't have the connection years ago between Metabolix and Yield10, so there's a lot of history here with Yield10. And then if we move to the right of Oli, we have David Clark, who is VP of Sustainability at Amcor, which is a global and diversified packaging company. He's been there nearly 20 years. And when I look at all the roles that he has had at Amcor, it seems to me that sustainability has been a part of every 1 of them, but it's his focus now and it's a significant focus of Amcor.

So that's our panel and I think we'll just get right into it here. And I think it would be helpful to have a little more background from each of you. But I'm going to throw the first 1 to you, Phil. Give us a little bit of a background for those that are not up to speed on Danimer Scientific. What exactly are you doing right now? What are you developing? What is the commercial path for PHA at Danimer?

Yes. Thanks, Steve. So at Danimer, we're focused on working with our brand owner partners and other partners to pull through applications to end markets. So we focus not only on the fermentation and production of PHAs -- various PHAs for different uses but also focus heavily on the application development to actually bridge these materials into final uses for end articles. So we have many partnerships, a couple of public partnerships for PepsiCo for snack food films and Nestlé for water bottles. But we're -- and then from a commercial standpoint, we recently opened our commercial fermentation facility in Winchester, Kentucky and are currently expanding that facility. Then also started engineering on a greenfield facility to further expand commercial production.

All right. Let's jump down to Oli. Oli, give us a little bit of background on PHA for you. How long have you been working on it? And give us this evolution from the Metabolix approach to the Yield10 approach.

Yes. So actually, I started my professional career at MIT. I'm not actually sure if had a professional career or had a passionate objective that I've been pursuing since the mid-'80s. Basically, PHAs are one of the most intriguing products that you can come across because it's a family of materials, as Phil knows, that really allow you to address a wide range of opportunities in the industrial space, also nutrition space strangely enough. So it's a wonderful molecule. It's a natural product. And we started off really founding a company called Metabolix in the '90s, light years ahead of its time in terms of we're going to use synthetic, what is now known as synthetic biology, to produce a wide range of these things when you do it cost effectively in a system that can be scaled. And as we built the company, we always had in mind that if you really want to make something that's bio-based, the ultimate low-cost answer is agriculture. So if you look at the scale of production of cornstarch and oils, vegetable oils, for example, the oils that Phil uses for his fermentation process, is on a vast scale -- global scale and it's a very, very low cost. In fact, it's more cost effective than most of the petroleum-based polymers out there. And so we were kind of going down that dual path, but obviously, the focus really became on the fermentation business. In the early 2000s, we struck a deal with Archer Daniels Midland. We built a large-scale PHA production facility in Clinton, Iowa. It was 50,000 tons of capacity, scalable to 4x that on that footprint so it was a pretty expensive capital investment. And of course, we ran into 2008, which was not a fun time for anyone. The plant was delayed in getting ready for manufacturing. And by 2012, ADM had seen that the market uptake for the product was not what we hoped it would be and ADM actually exited the business. So Metabolix continued to try to move forward on its own. But when you're sort of state -- I think Danimer has a tremendous advantage because it has a very significant compounding business, so it's got this wonderful base business to build off of. So they are just much better positioned. The other thing that happened is recycling became kind of the big mantra of the whole entire classic sector from producers all the way through to the consumer products companies. And then oil and gas prices started to collapse, and that result as no one was interested in bio-based anymore. Everybody was building new crackers to make more polypropylene, polyethylene. And of course, the whole thing kind of came to a close. While we've been doing all this, we actually learned that you could pretty much make most of the single-use packaging with PHA and the biodegradation in all the environments. That's exactly as you could predict from an actual product. So great product. We made a wide range of these things: films, injection molding, sheets, thermoforming trays, food trays, all kinds of widgets. But ultimately, at that time, the cost situation was not attractive. And ultimately, the business got into trouble, and we ended up selling it in 2016 to CheilJedang, which is a large Korean bioproducts company. They are actually beginning to commercialize that now as I understand it. But we -- then we became Yield10 Bioscience. And the reason that we became Yield10 is because we were producing PHA in engineered camelina, and we were finding that we didn't have enough carbon available to make PHA and oil in protein. And so we started looking at ways to improve the efficiency of crops, to increase our productivity. And we discovered some pretty interesting gene traits for improving crop yield. And that led us to becoming Yield10 Bioscience. And we focus primarily on the traits initially but we kept the PHA crop science program moving. And then to 2020, we had our first successful field trial of PHA production in camelina, which is an industrial oilseed, very suitable for double cropping as a cover crop in the upper Midwest. So it has a strong sustainability, low carbon footprint. I don't know, just beginning to essentially enter that sort of early stages of commercial development for crop-based PHAs.

George?

Thanks, Steve. Oli, Phil, thanks very much for being here. David, welcome. Great to have you. And maybe you could give us a little bit of background on how you got into the sustainability business and talk about, for a minute or 2, why it's important to Amcor. And then we'll get into the mini-Q&A.

Yes. Sure. I guess, before people even said the word sustainability, the environmental issues have been something I'd always been interested in. But actually had spent the first part of my career doing electronics manufacturing and ended up joining Amcor as a plant manager running a recycling plant, not because I knew anything about plastics or recycling but because of my operations experience. And just over time, as the issues around plastic waste sustainability have become more important, as Steve said, just about every role I've had within Amcor has touched on sustainability in some way or other. So it's been an interesting journey and as many people who are -- our age have touched on different things in their careers and it's put a bit of a random walk but it's worked out really well. In terms of Amcor, as Steve mentioned, we're a manufacturer of packaging. So we essentially buy raw materials and turn them into packages that our customers would use. So we make packaging for food, beverages, home, personal care products, medicine, pharmaceutical products. And each of those has different characteristics in terms of what the package has to do to protect that product to make sure that it stays safe. So in some cases, we're looking for high oxygen barrier. In other cases, we need to keep moisture in or moisture out. And that's what we do best is find the best materials for each of those different products so that it can be delivered through the supply chains and maintain its safety and freshness. And recently, what we're seeing is a big attention or interest in what happens to those products at the end of their life. Obviously, plastic waste is an issue that more and more of our customers and Amcor care about as well as consumers and governments. So we're really looking at what are the opportunities to create different end-of-use or end-of-life pathways, whether it's recycling, compostability or, in some cases, packaging reuse. And that's what products like PHA can fit into that, if we can match the performance characteristics with the end-of-life that our consumers or our customers are looking for the packaging that we make.

Thank you, David. Steve?

That comment about matching performance characteristics, David, that leads me to wanting to ask a question and perhaps both Phil and Oli can address this. And that is -- and Oli, you mentioned that you were working -- I mean, in the past, you were able to produce films and injection molding products. And Phil, when I've discussed this with you, my understanding is as the carbon chain length within this polyester gets longer, you end up with a product that is more flexible, shorter chain, harder, maybe more brittle. How did you discover that? And maybe, more importantly, getting to David's question is, does that suite of products that you can produce that fall into this bucket of PHA, can it achieve the performance characteristics of most of the resins that David needs to buy?

Yes. So when you look at the structure of PHAs, you can go from very stiff and brittle type materials to very soft and supple materials, all the way to grades of PHA which are fully amorphous, that are more like rubber and can be used as additives. So when you think about rethinking the packaging solutions, right, many of the products that the end consumer goods companies need, as David mentioned, need multiple layers, various barriers. Packaging is actually a very complex animal, if you will, right? There's -- when you think of the -- what you see on store shelves, very little is simple packaging. Many of the films are multiple layers, different materials and those different materials perform different functions. So when you have to reimagine the final structures with this new requirement of biodegradability, then you have to reimagine the types of materials that can be used as analogs and provide those same performances. So when you think about multilayer packaging, you may have several different types of PHAs and other bio-based materials, which function again as analogs to some of the current materials that are used in those packaging formats. So it takes a lot of work. And what ultimately drives that upstream ability to do that is having a technology platform using synthetic biology, as Oli noted, where you can pull those different types of materials and produce them to deliver the end structures. So it's really bringing the front-end technology to the end application development and then working with companies such as David's Amcor, who actually make these articles in order to deliver to the final consumer structure that works. Oli, if you have some other thoughts?

Yes. That's a key point there. I think in reality, what you see is that there's this assumption because plastics are super low-cost compared to most other materials, that they're somehow technologically inferior, when in actual fact, they're tremendously sophisticated with a vast amount of science and technology going into that. And what we find is the polymer companies and the polymer scientists are very rightly, very proud of this. But one of the things I think we need to think about when we rethink how this all goes is what are we trying to achieve? We're not trying to achieve polyethylene performance. We're trying to replace -- in a coffee cup, for example, what we're really trying to achieve is a barrier that allows the consumer to drink his hot cup of coffee without tasting anything that's unpleasant and then that can contribute to safely disposal. So what really this industry drives to ultimately is adequate performance at the lowest cost. That's what we found. That was the experience we've had. And we discovered that at the right cost structure, some of these properties that they insist on would actually begin to sort of go away because there was other values in these products. But Phil is absolutely right. We were able to, using synthetic biology, make a wide range of these things. And then, of course, if you think about it, you've got the blue cans, you've got amorphous trade engine, you've got the crystalline range, you've got something in the middle. We actually ended up making a wide range of blends, which is pretty much what polyethylene is anyway unless you're using metallocene or something like that. And that's what you find is there's a tremendous amount of sophistication in the polymer science. But ultimately, what it comes down to is delivering a product that has adequate functionality over the lifetime of the product, which in the case of most food packaging, is probably 6 months and can deliver what's maybe for that consumer product. And I think that's where, obviously, folks like Amcor are very busy.

Maybe if I can step in. David, if you could talk about -- to the extent you've had experience with these materials, are there end uses products that PHA, given your background, would tend to best lend itself to -- lend themselves to? And then putting on your plant manager hat, are there differences in terms of the way the material would process on the line, either on an extruder or on a blown film line relative to the classic polyolefins that an Amcor or another company like yourselves would be using?

I think the answer to the first part, George, is it depends on a lot of things. I mean, part of what we're looking at, as I said, is which products are going into the package and what's the current performance requirement of that package. And as Phil said, we can engineer different performance characteristics with packaging. The question is, can we do that with the PHA material and still maintain compostability or biodegradability? So that's a part of the puzzle that our engineers are working on and our R&D scientists together with Phil's company and other suppliers. The other question is then, okay, what's the end-of-life scenario for the consumer in that case? Is it something that they are going to be able to put in the compost bin? And what's appropriate? And there are some markets like, I think, foodservice or if you imagine, coffee pods, where they're going to have food along with them. And it's natural that they would go into a composting scenario or probably a more natural fit than maybe some of the other use cases that we see for packaging. So there's a lot of thought going into both the design part and the end-of-life scenarios for different packaging. And we spend a lot of time with the brands and others thinking about where the best fits for these types of materials. The good news is within our manufacturing processes, if you're looking at extrusion, lamination, printing, slitting and sealing, those types of things, the equipment that we have today can run these types of materials. We would move from converting conventional resins to converting these. The changeover for our part of the converting value chain would be very simple, in most cases. The minimal incremental investment would be required to make packaging with PHA and these types of materials.

One last quick 1 for me. Would the material have any issues with more aggressive products like a tomato sauce or with carbonation or no, not really? Or it's probably all -- it depends? So you can say what you want.

Yes. I'm going to say it depends and maybe turn this over to Phil and Oli, the technical experts here. But as I said, a carbonated beverage bottle, for example, as Phil said, it's heavily engineered to keep that CO2 in over a long period of time. So the question is, can you develop a product that is based on PHA that has the same strength in barrier properties? I don't know the answer to that one but I guess I would turn it over to them to see if that's a possible pathway.

Yes. So for CO2 is probably one of the applications that you would not target with PHAs. The typical PHAs are, in order of magnitude, off on CO2 property -- or CO2 barrier properties from PET. So that's probably the 1 application that we wouldn't focus on. But other type barriers like what you see for acidic foods like tomato sauces and those sorts of things would not be an issue at all for PHAs.

Yes. That's pretty much what we've found too. We never really looked at soda bottles in particular, simply because of the gas barrier properties of the PHA has not been adequate. But we did look at extensively on grease barrier, water vapor transition base. All of these things are reported in other applications. And for the most part, those things can be solved fairly readily, but we never really looked at gas barrier properties, which is the CO2 process.

If I could just add quickly, with soda bottles, they are already made with PET and are recyclable almost everywhere in the world. So we have a suitable end-of-life scenario for PET bottles already. It's the highest recycled plastic, one of the highest recycled materials. So solving that issue is probably less a priority than some of the other things like Phil was explaining, the multilayer flexible packaging that don't have a pathway toward recyclability today is probably where we'd focus more of our attention for these new types of materials.

Yes. When you look at, at least where I live, there's a big sticker on the top of the recycle bin, and they take polypropylene, aluminum and PET. And they -- everything else goes to the landfill. They won't even -- they get mad if you put it in your recycle bin. So when you think of the opportunity to replace all of those things that are currently just being landfilled or end up as leakage in the environment, you think of challenging parts of the world where there is no waste infrastructure, it's just a huge opportunity for PHAs. When you think about us as mankind, we have this 70-, 80-year gap where we've started making things that don't go away. And previously to that, everything that we used went away or was innocuous in the environment. So there's a huge opportunity for PHAs to replace all of those plastics that currently there's not a good outlet. They're soiled with food waste or other waste. It's just a challenge for recycling those.

And what makes up these complex multilayer products that you were referring to, Phil? Can PHA provide the resin for each one of those layers so that this whole complex package -- packaging material is all PHA? Or is this likely to be a combination of pet chem resins and PHA?

No, you can utilize various grades of PHA for all the structures. And there's also other materials which are fully biodegradable as well that can be used that may provide certain functionalities or certain barrier functionalities. So the typical multilayer structure can be, when you think about barrier performance, can be different materials. We may use different EVAs or nylon or polypropylene. These ABA or ABC or ABCD structures can be fairly complex. And every application that utilizes these is a different project. But the -- you can most certainly use a suite of materials which are all biodegradable in order to mimic or provide similar or substantially similar properties to incumbent materials.

And so maybe a follow-on to that, and I'll throw it to both Phil and Oli. What are some examples of applications, say, other than PET where PHA is still not able to achieve the performance characteristics of the pet chem resins?

So for the most part, what you're really talking about is areas that require high heat, which is not really packaging. It may be in some instances where you're microwaving things, but generally speaking, a lot of the high heat polymers. If you look at the whole polymer chain, what you see is what they call the exclusion curve, and you see these amazing materials with a very high heat resistance, are used in all kinds of things like aerospace. And then you get down into the sort of lower end, which is the polyethylene, polypropylene, polystyrene and you see things down there. So the gas barrier properties is definitely a limitation. Heat resistance above 200 centigrade is an issue. But I think, generally speaking, for that vast amount of material that's used in sort of in the foodservice ware and in the food packaging area, these materials are the right kinds of properties and functionality. And it fits in with the whole food waste infrastructure, which is a key point that David raised. It's really about using it where it makes sense, not trying to break something that actually is one of the few success stories in recycling, which is PET bottles and destroy -- sort of disrupt that. I think it's more about where these things really fit.

George?

Thanks, Steve. Dave, a quick question for you on this, and I recognize the answer might be something to the effect, again using this whole suite of resins and bioresins and engineering and development, you're going to custom design a product that best suits all the needs of all the constituencies. Having said that, do you think there's any risk that if we start to see more and more use of resins that are compostable and that attribute is marketed to the consumer, hey, we have packages now that are compostable, that it creates confusion and that we may risk a -- will be a headwind to recycling? And for that matter, some of the deposit fees that drive -- that come from recycling and then will fund the infrastructure for more recycling, compostability might interfere with that? How -- do you think that's a real worry for the consumer or for the investment community, or we really shouldn't be worried too much about that?

I think it is a risk. It's hard enough to get people to recycle in some cases, and if we give them another option, there is risk of confusing the consumer. So I think that's one of the reasons it's important to think about which categories is this product appropriate versus which 1 is not. And as Phil said, if we're looking at products that are not being recycled and are not recyclable today and introduce compostable products, I think the risk is much less than if we tried to mix compostability into the consumer's mind with products that are already recyclable. And I think one of the reasons it's a risk, too, is if PHA or other materials end up in the recycling stream, they become contaminants, and it then can actually impact the efficiency of the recycling operation. So it really -- part of the responsibility introducing these products is making sure they end up in the right places and we can help develop the infrastructure to do that, whether it's composting or recycling and then help consumers understand where each of these different products should be appropriately disposed of once they're finished with them.

So how do you deal with that -- go ahead, David.

No, go ahead. Go ahead.

So how do you deal with that challenge? And Phil and Oli, what would you say, and what would be your strategy over time to deal with that potential confusion and issue that would evolve, ultimately preventing more usage of plastic, which ultimately you'd like to see either bio-based or traditionally-based?

I think the short answer is, number one, convenience and end of use, whether it's recycling or composting and making sure that it's easy for consumers. And then some consumer education so that people can see where things go. And compact labeling is becoming more popular. We see instructions around recycling. We can do the same for compostability. And I think if we get to the point where composting becomes an important end-of-life scenario for packaging, then we'll see more brands get involved with ensuring those composting infrastructures exist the same way they're involved with recycling now through partnerships and organizations to promote recycling of the packaging that they make.

So I think this is an area where you're really seeing an industry that's sort of being forced to address its major Achilles' heel, if you like, which is the accumulation of plastics in the environment. And part of the reason that Metabolix signed it up and where it ended up was the sort of big focus on convincing the consumer that recycling was really happening in a big way, although it was happening for PET, and that's the area that actually appears to work. A lot of that was essentially being exported to China and landfilled in other parts of Asia. So we need to be careful that we don't understand this is -- recycling is not a panacea for anything. It has demonstrated over the last 20 years that it's not. It's a major part of the solution and it's essential because there's a lot of plastics that cannot be replaced by PHA, just as there's a lot of plastic packaging in foodservice where they can. And so I think we need to think about this very holistically and understand that there's always going to be a tension between the interests of the incumbents and newcomers into the field. And this is just as true -- it's true in every industry. It was true of the whole agricultural system where you saw GM traits really drive a massive consolidation of the sector and essentially big ag taking over to the point where you've now got several hundred million acres per year of GMO crop production, all the tremendous environmental benefits, by the way. But that's what you're going to see. You're going to see this natural tension. And what will happen is it will just happen over time and again, the systems will adjust to meet it. But it is important that we don't try to get into areas where the product doesn't make as much sense as the PET bottle, for example, where recycling is really a pretty good option. And in fact, NatureWorks' PLA bottle ran into that exact same problem when it came out probably sometime around 2010 or '11. And they were really pushing a PLA bottle, but eventually, what happened is the impact on the recycling of PET became a big problem for them and rightfully so.

Thanks, Oli. I have a question that I'd like really any of the 3 of you to address, and that is the sustainability question of PHA. Whether it's bio-based or biodegradable, which of those 2 attributes of PHA do you view as having a greater value proposition, the fact that it can be a sink for CO2 and that you're pulling it out of the atmosphere to make this product? Or the fact that this is not going to be floating around in the ocean and can be degradable there? Which of those 2 do you view as having either more of an ask from Oli and Phil from the customers that you're working or from David to the customers that you're working with? Which of those 2 would you view as being more important?

I would say that they're both important. And even when you look inside major consumer products companies, they may have some sub-brands where 1 may be more important than the other. And when you think globally as far as legislation, our products can be -- can exist everywhere. So 1 part of the world may be more focused on sustainability in bio-based content. Another region or another part of the world may be more focused on end-of-life or biodegradability.

a compelling sustainability story. You're making essentially PHA plus essentially oil, which we'd look at as potentially going into the renewable diesel market. And then obviously, a pretty high-quality protein for animal feed. And so the way we view this opportunity is there's going to be a lot of hedging between those 3 products. If the demand for oil, for renewable diesel goes up, then obviously, the value of that oil can be very effective in mitigating the cost of PHA production. Of course, the value of that oil is completely dependent on its carbon intensity. And so we would actually probably transfer the carbon benefits of the PHA produced directly from CO2 and the crop to the oil to increase the value of the oil because our belief is that you'll be selling the PHA on the basis for bioavailability, which is the thing that's really got the public's excitement at this stage.

And I'll just -- I'll add, from our perspective, we see both. Consumers -- or I'm sorry, consumer brands have committed to use less conventional virgin resin. And the pathways to do that are using more recycled resin, using bio-based resins, whether they're also compostable or the conventional resins like PE or PET that Oliver mentioned, as well as reuse in some other pathways. But people want to use less virgin conventional resin over time, decouple the demand for petroleum with the products that they're making. And on the other hand, where it's appropriate, we have a new end-of-life avenue with compostability and biodegradability that can solve the environmental problem of plastic waste. So it's different by customer but both are advantages, I think.

Steve, if I could just chime in. We do a survey on packaging perceptions of the consumer. Now some of this is -- it's kind of what you'd expect, right, because the focus over time has really been on recyclability. But to the consumer, based on our survey data so far, recyclability is the sort of the key metric that consumers are attribute, that consumers look at in terms of where they think something is sustainable or not. Compostability is relatively low, but then again, that's what you'd expect based on the fact there hasn't been as much of this available to the market. So it would be, to Phil and to Oli and to Amcor, to when that is at scale, promoting that to educate the consumer. Steve?

I'd like to throw 1 at Phil and Oli. And that, is do you see some potential opportunities to use PHA in a way that's unique, i.e., pet chem resins do not function in a particular application that you have discovered PHA can? Anything there that you could comment on?

So I think there's 3 areas that we've kind of looked at over time. And obviously, we did a lot of work in all of those areas. One is the area of functional degradation where you want to put something in the environment that has plastic properties but you know it's going to go away. And so we did look a lot at shoreline restoration projects, planting doob grasses, reseeding essentially reefs, that type of thing. Agricultural mulch films is another area where you're going to have herbicides and pesticides on some of those films. We did a lot of work in ag mulch area. And then you get into some areas where PHA is just really unique. So PHB is a very interesting molecule. It's actually the primary source of the key ketone body for the human brain, which is why Phil and I are so smart. And so basically, it's a tremendous source of a nutrient that's actually being increasingly linked to health benefits in humans because it's a chiral monomer. It's basically handedness. The second area is actually heavily underlooked but has been a run for a long time is actually water treatment. And we did a lot of selling into the water treatment market because PHA is a natural controlled release, hands-off -- hands-free substrate for actually denitrifying bacteria to remove nitrate from water. So it's a tremendously interesting device for reducing nutrient pollution, which, of course, comes, in large part, for human activity, whether that's humans using the toilet or whether it's basically agricultural production of food. You're seeing massive increases in nitrate and phosphate in water. And this is a pretty much a sort of a natural way to rebalance the carbon-nitrogen cycle. And we see tremendous opportunities in that for cost -- for low-cost PHA from crops. Very low tech unlike the plastics and the packaging sector. Doesn't require high purity. I don't have to worry about the cycle time through an extruder or whether it has the right organoleptic properties for some kind of food contact application. It's a very simple application but it's completely driven by cost.

Phil, anything you're working on that's kind of unique for resins?

Yes, the applications that Oli mentioned are most certainly great areas and opportunities. But some other things that we can think about, especially in the COVID world today, is just the increase in disposable fiber type applications, right? So things outside of your typical consumer packaging goods or food packaging. We use a tremendous amount of fibers for masks, personal hygiene products, diapers and other things. The market is actually quite large. And all those materials don't have a good opportunity for recycling and in a lot of instances are contaminated or soiled just by the nature of what they're used for. So that's definitely an application area that is a great fit for PHAs as well.

George?

Maybe 1 last question for me to wrap up, Dave. Amcor buys 3 million more than that metric tons of material every year. I think 70% of that is resin, but you're also buying metal fiber liquids in terms of making your valuable packaging structures. Which do you think of those materials currently has the least impact on the environment and is most sustainable? We hear a lot from all of the substrate producers and all of the packaging companies who have an axe to grind, so to speak, in 1 area or another. What's your view since you're in all the materials in one form or another?

We've touched on this a bit even during this discussion is the sustainability of the environmental benefits of a package depend on its job and what it's doing. And each of those materials has different attributes. So over time, plastics have developed into a preferred material for many of those applications but there are still others where paper is appropriate or metal foils are the best doing the job that needs to be done. And regardless of the material that we choose, we just have to make sure that it's sourced responsibly and if there's a responsible end-of-life for it. So depends on the application is, I guess, maybe not a satisfactory answer but it's the 1 that we use as our approach when we're making packaging.

We understand, Dave. Steve?

I think we've run out of time but we could continue this at great length, I'm sure. But I just want to say thanks to all of you for joining on this early hour for where you're located. It's a fascinating area. We're certainly going to stay on top of it, and our best to all of you. Thank you.

Thank you.

Thank you.

Thank you. Thanks again, Steve.

Take care, guys. Thank you.