Now here's a sweet deal: Dow Chemical Co. and ethanol maker Crystalsev Comérico e RepresentaÃ§ão Ltda. plan to use sugar cane to make polyethylene at a new plant in Brazil.
Midland, Mich.-based Dow and Crystalsev of Ribeirao Preto, Brazil, announced plans for the plant July 19. The facility will have annual production of almost 800 million pounds of PE and is expected to begin production in 2011. No cost estimate for the project was available.
In a news release, Dow Chairman and Chief Executive Officer Andrew Liveris described the project as ``the first world-scale polyethylene facility that will use a renewable feedstock.'' Crystalsev's sugar cane will be converted into ethanol, which then will be used in PE feedstock ethylene.
The firms have begun a yearlong study to decide on project details and find a location. Areas being considered currently are being used for low-density cattle grazing and are not near any rain forests, officials said.
``The beauty of this project is that it's going to make the same Dowlex polyethylene that's made around the world,'' Dow's Jim Fitterling said in a July 20 phone interview. ``It will be a drop-in product for our customers.''
Most of the PE produced by the new plant is expected to be sold into the Brazilian market, which is growing because of new applications in food packaging, consumer goods and health care, said Fitterling, who serves as president of Dow's Basic Plastics business. Currently, Brazilian customers are served by a PE plant in Bahía Blanca, Argentina, and by some material imported from North American sites.
Fitterling said that Brazil's experience with ethanol played a key role in the decision to build.
``Brazil has been at it for 30 years, and ethanol already makes up about 25 percent of their fuel pool,'' he said. ``This is more of a long-term strategy. Brazil is where they are because of a government program to be less dependent on foreign oil.''
As for the possibility of a similar ethanol-fueled plant being built in North America some day, Fitterling did not rule it out. But he did say if such a plant were to be built, it probably would not use corn as a feedstock, as most U.S.-made ethanol currently does.
``Corn is disadvantaged vs. sugar because it has a longer fermenting process and needs more acreage,'' he explained. ``So we're looking at other sources of feedstock around the world.''
Dow ranks as the world's largest PE maker and already operates 21 plastics and chemicals facilities in Brazil, including a polystyrene plant in Guaruj . Dow has done business in Brazil since 1956 and currently employs 2,100 there.
Crystalsev employs 30,000 and ranks as Brazil's second-largest sugar cane producer. It also produces almost 4 billion pounds of sugar annually, accounting for 8 percent of the country's total.
The Dow-Crystalsev project is not connected to a similar project announced earlier this month by Brazilian petrochemicals firm Braskem SA. Those plans call for Braskem to open a 440 million pound-capacity, ethanol-based high density PE plant in Brazil by late 2009.