To establish two joint ventures for plant-based products and bioplastics
LG Chem and ADM (Archer Daniels Midland) have completed agreement for ‘Eco-friendly bio plastic’ joint ventures. LG Chem held a ceremony to celebrate the launch of LA (lactic acid) and PLA (poly lactic acid) Ventures’ with ADM (Archer Daniels Midland), the company said on Aug. 16.
ADM, a global leader in nutrition and sustainable products and solutions, has a global agricultural supply chain and processing technology, and LG Chem has cooperated in developing plant-based bio materials.
This agreement is the main contract following the conclusion of the Heads of Agreement (HOA) signed by the two companies in September of last year.
The two companies will establish two joint ventures to respond to the demand for plant-based products and bioplastics. The LA production corporation ‘GreenWise Lactic’ will be in charge of the raw materials to produce 150,000 tons of high-purity corn-based lactic acid annually.
The second joint venture, ‘LG Chem Illinois Biochem,’ will use GreenWise Lactic’s lactic acid to produce 75,000 tons of bioplastics annually.
If LG Chem Illinois Biochem makes 500ml eco-friendly water bottles with bioplastics from the factory, it can produce about 2.5 billion bottles. The production facility will be built in Decatur, Illinois, U.S., with the aim of completing it in late 2025 or early 2026.
Construction is scheduled to begin in 2023, when the final decision of the boards of both companies are completed.
LG Chem Vice Chairman Shin Hak-cheol commented, “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. 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.”