ADM, LG Chem to produce lactic acid, bioplastics in Illinois

South Korea-based LG Chem and Archer Daniels Midland Co. on Aug. 15 announced the launch of two U.S.-based joint ventures, GreenWise Lactic and LG Chem Illinois Biochem, to meet demand for plant-based products and bioplastics.

The launch of the joint ventures follows a memorandum of understanding (MOU) signed by the companies in September 2021 to explore U.S.-based production of lactic acid to meet growing demand for a wide variety of plant-based products, including bioplastics.

The first joint venture, GeenWise Lactic, aims to produce up to 150,000 tons annually of high-purity corn-based lactic acid. GreenWise Lactic would be majority owned by ADM, which would contribute fermentation capacity from its Decatur bioproducts facility to the venture. The second joint venture, LG Chem Illinois Biochem, would use product produced by GreenWise Lactic to produce approximately 75,000 metric tons of polylactic acid (PLA) per year. LG Chem Illinois Biochem would be majority owned by LC Chem, with the proposed facility built in Decatur, Illinois.

Construction is currently scheduled to begin in 2023, pending final investment decisions. The projects could be complete by late 2025 or early 2026, according to LG Chem.

PLA is a biodegradable bioplastic made with lactic acid. The material is primarily used in food containers, straws, water bottles, tableware, and tea bags. The proposed LG Chem Illinois Biochem facility would have the capacity to produce roughly 2.5 billion 500-milileter (16.91 ounce) water bottles each year.

According to ADM, global demand for lactic acid, which is also broadly used by the food, feed and cosmetics industries, was valued at $2.9 billion last year, with an expected annual growth rate of 8 percent. Global demand for bioplastics and biopolymers is expected to grow from $10.7 billion in 2021 to $29.7 billion in 2026, an annual growth of 22.7 percent.

“Sustainability is one of the enduring global trends that is powering ADM’s strategy and growth,” aid Juan R. Luciano, CEO of ADM. “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. 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 growing demand for plant-based solutions. We’re pleased to expand our collaboration with LG Chem, and we’re excited at the opportunity to bring this new intended production and all of its economic benefits to Decatur, our North American headquarters.”

“The establishment of this joint venture is a sustainable growth strategy that can directly contribute in solving environmental issues such as climate change and waste plastics,” said Hak Cheol Shin, CEO of LG Chem. “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. 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.”