Biochemicals maker Metabolix Inc. (MBLX) said it will reduce its bioplastics business after partner Archer Daniels Midland Co. (ADM) decided to pull out of the two companies' joint venture.

Metabolix shares dropped 45% to $3.30 after hours following a halt on the stock. It had climbed 23% over the past three months through Thursday's close.

News of ADM's choice to leave the companies' Telles LLC joint venture comes a day after the agribusiness giant said it would cut 1,000 jobs, or 3% of its work force, amid simmering investor discontent about the returns on its capital expenditures in recent years, including new ethanol plants and the bioplastics venture.

Formed in 2006, the Telles joint venture produces plant-based biodegradable plastics for the U.S., Europe and other countries. Metabolix said it is still working out the details of its plan to trim its bioplastics business, a move that will cost between $2 million and $3 million in restructuring charges this year.

The company said it will continue focusing on developing renewable industrial chemicals, though management is also conducting a strategic review of its business priorities for 2012.

"Over the past few years, we now have proven the technology at industrial scale and believe that we now have the opportunity to launch this business with a different business model," Chief Executive Richard Eno said. "We will be evaluating alternate plans for commercialization and clearly wish to supply this growing market in the future."

ADM made its decision after looking for "areas that are not delivering sufficient results now or are not expected to deliver sufficient results within a reasonable timeframe," Mark Bemis, president of ADM's corn business, said in a statement. He added there was uncertainty about projected costs and the rate of market adoption.

Morgan Stanley, in a December research note, called the venture "a very high-return investment, though the payoff is likely many years away."

Analysts say the company's capital expenditures from 2007 to 2010, focused mainly in the U.S., have not produced enough returns to satisfy some investors. The company has since shifted its focus on international projects that will expand its grain merchandising and processing capacity.

ADM will still keep a Clinton, Iowa, factory that has produced the plastic resin after it withdraws from the partnership on Feb. 8. Metabolix will retain all the technology used in the joint venture.

Metabolix ended 2011 with an unaudited cash and investment balance topping $78 million.

ADM's stock was up 0.1% to $29.18 in after-hours trade. It is down 11% over the past year.

-By Drew FitzGerald and Ian Berry, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com; ian.berry@dowjones.com

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