Korean chemical giant joins hands with ADM of the U.S.
LG Chem, South Korea’s largest chemical company, announced this week that it had signed an agreement with ADM from the United States to cooperate in churning out plant-based bioplastics.
Under the agreement, they will set up two joint ventures of GreenWise Lactic and LG Chem Illinois Biochem to build plants by mid-decade.
The former will come up with 150,000 tons of high-purity corn-based lactic acid a year, while the latter will roll out 75,000 tons of polylactic acid, the biodegradable plastics.
Seoul-based LG Chem is a parent company of LG Energy Solution, the world’s second-largest rechargeable battery maker, while Chicago-headquartered ARM is a multinational food processing firm.
“Sustainability is one of the enduring global trends that is powering ADM’s strategy and growth. Our BioSolutions platform is helping us meet that demand by redeploying Carbohydrate Solutions production capacity to fast-growing, higher-margin segments – including pharmaceuticals and personal care, textiles, and paper products,” ADM CEO Juan R. Luciano said.
“BioSolutions is already growing rapidly, with $136 million in year-over-year revenue growth in the first half of 2022, and with these two new joint ventures, we’re planning to take the next growth step, greatly expanding our ability to meet the growing demand for plant-based solutions.”
LG Chem Vice Chairman Shin Hak-cheol said the establishment of this joint venture is a sustainable growth strategy that can directly contribute to solving environmental issues such as climate change and waste plastics.
“LG Chem is the first Korean company to build a PLA plant with integrated production capacities ranging from raw materials to the final product. With the establishment of this JV, LG Chem will not only procure production capacities for highly pure lactic acid needed for commercial-scale PLA production but will also be able to apply biomaterials in the development of various high-value-added products,” he said.
“Based on eco-friendly materials, which is an axis for new growth engines, we will respond to the rapidly changing market and customers while becoming a market leader.”
The market for bioplastics and biopolymers is expected to grow from $10.7 billion in 2021 to $29.7 billion by 2026. This means that the size gets larger by 22.7 percent a year.
The joint ventures, which are subject to required regulatory approvals, hope to make final investment decisions around the Decatur projects in 2023.
Pending final investment decisions and approvals, construction would be targeted to begin in 2023 and production in late 2025 or early 2026, with the two joint ventures supporting more than 125 jobs in the Decatur region, according to LG Chem.
“I am thrilled that LG Chem and ADM have chosen Decatur as the home for their joint ventures,” Illinois Gov. JB Pritzker said.
“Our state’s talented workforce coupled with our mission of sustainability make Illinois the best place for these lactic and polylactic acid production facilities.”