LG Chem Ltd. and agribusiness firm Archer-Daniels-Midland Co. (ADM) are taking the first steps toward building a new lactic acid and polylactic acid production plant in the U.S.
The companies signed a Heads of Agreement for the establishment of a new joint venture for that purpose, and plan to sign the definitive agreement in the first quarter of 2022. Construction of a PLA plant with an annual capacity of 75,000 tons and lactic acid production plant is projected to be competed by 2025.
PLA is produced through the fermentation and refining of glucose extracted from a plant source such as corn. The companies did not reveal a location for the project.
As a global grain processing company, Chicago-based ADM operates crop procurement facilities in 200 countries around the world and has gained ample experience and expertise in glucose production and fermentation technology. The cooperation with LG Chem will create a new "opportunity for growth in solutions based on bio-based materials and the enhancement of value for our customers," ADM CEO Juan Luciano said.
LG Chem is increasingly seeking to expand its portfolio of sustainable bio-based products. The vertical integration provided by the joint venture will secure the production of high-purity lactic acid at a commercial scale, yielding a stable supply of the raw materials required for PLA production. The company plans to actively penetrate into the bioplastics market based on its PLA production capacity.
Previously, LG Chem signed a joint development agreement with ADM to secure mass production technology for eco-friendly bio-acrylic acid. This initial cooperation laid foundations for the current establishment of the PLA joint plant. Bio-acrylic acid is mainly used to produce eco-friendly super absorbent polymer, a raw material for diapers and various hygiene products, based on advanced grain fermentation technology and advanced catalyst manufacturing technology.
Establishing a joint venture with ADM will be the start of a "new journey" said LG Chem CEO Hak Cheol Shin.
"As a leading company for sustainability, we will actively seek new ways to contribute to carbon-neutral growth," he said.