LG Chem and Archer Daniels Midland (ADM) have announced that they have taken the first steps towards a collaboration that is ultimately intended to lead to the construction of a new lactic acid and polylactic acid production plant in the US.
The two companies have 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 next year. Construction of a PLA production plant with an annual capacity of 75,000 tons and LA 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.
As a global grain processing company, 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’, said ADM CEO Juan Luciano.
LG Chem is increasingly seeking to expand its portfolio of sustainable bio-based products. The vertical integration provided by this 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 (JDA) 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.”