Toyota Motor expects its production of biodegradable plastics to grow into a four trillion yen ($US38 billion) business by 2020 when the company hopes to control two-thirds of the world’s supply.

“We are one of the world’s two major players in this field along with Cargill Dow (of the United States),” Kozaburo Tsukishima, general manager of Toyota’s biotechnology and afforestation division, told Reuters in an interview.

“(The biotechnology arm) could really explode as a business, and may have the biggest growth potential out of all of our operations,” he reportedly said.

At four trillion yen, the business would represent one quarter of what Toyota made in total revenues in the business year to March 2003 and be double the sales at Japan’s top minivehicle maker, Suzuki Motor, Reuters said.

Toyota set up its biotechnology division in 1998 as part of a 50 billion yen venture fund set aside two years earlier by then-president Hiroshi Okuda, now the company’s chairman, the report said.

In addition to producing bioplastics, which are derived from agricultural products and natural sources such as sugar cane, corn and tapioca, the division grows flowers, rooftop gardens and produces flour using new technologies, Reuters said.

The news agency noted that Toyota late last year said that it expected an operating profit of 1.7 billion yen on sales of 5.4 billion yen in 2007 for its biotechnology division – the figures do not include its bioplastics business, which is still at an experimental stage.

Tsukishima reportedly said Toyota began using bioplastics in some new cars last year, including the Raum and Prius models, but also supplies the material to Japanese cosmetics maker Shiseido and other companies. Apart from emitting no harmful gases when incinerated, bioplastics burn at low temperatures, requiring less fuel for disposal, he added.

Reuters said Toyota produces a small amount of bioplastics at a domestic factory it bought from precision machinery maker Shimadzu Corp., and is planning a 1,000-tons-a-year experimental plant in Toyota City this autumn.

“If we succeed in bringing production costs down, and clear other hurdles, we plan to build a proper plant with annual capacity of 50,000 tons, perhaps by around 2007,” Tsukishima told Reuters.

Tsukishima reportedly said by 2020, one-fifth of the world’s plastic would be biodegradable – equivalent to 30 million tons.

“We want to be supplying 20 million tons of bioplastics by 2020, which would amount to about four trillion yen in revenues if we sold it at 200 yen per kilogram,” he told Reuters, which noted that bioplastics now cost between 500 and 1,000 yen per kg, about five times the price of conventional petroleum-derived plastics.

Reuters also noted that, though Toyota gets the bulk of its revenues from vehicles, it also offers financial services and builds houses.