Chicago, IL and Seoul, South Korea—LG Chem and ADM have signed a memorandum of understanding (MoU) to explore U.S.-based production of lactic acid to meet growing demand for a wide variety of plant-based products, including bioplastics.
“Consumers today are increasingly prioritizing environmentally-friendly, responsibly-produced products when they make buying decisions,” said Juan Luciano, Chairman and CEO of ADM. “ADM is meeting that demand for both nutrition and biomaterials customers alike. For non-nutrition customers, our BioSolutions growth platform is using our product streams to grow our presence in sustainable, higher-margin demand areas as wide ranging as pharmaceuticals and personal care, textiles, paper products, and even adhesives for helicopters. Today’s agreement is yet another way in which we’re delivering on growth opportunities in plant-based solutions. We’re excited to work with a global leader like LG Chem to expand US production of lactic acid and continue to expand our capabilities to meet growing demand for responsibly-produced products.”
Under the terms of the agreement, the two companies will take steps towards launching a joint venture in early 2022 that would build, own, and operate a U.S.-based facility to produce high-purity corn-based lactic acid on a commercial scale. Additionally, the companies will collaborate on a second joint venture that would use lactic acid produced by the first joint venture to produce and commercialize polylactic acid (PLA), a plant-based, biodegradable plastic that can be used in products ranging from food packaging to clothing.
The two companies also agreed to actively cooperate in the joint development of technology for other biomaterials that can be applied in the biochemical and sustainability sector in the future.
“The establishment of a joint venture with ADM would be the beginning of a new journey, formalizing our cooperation and advancing us toward a sustainable business structure for the benefit of the environment and society,” said Hak Cheol Shin, Vice Chairman and CEO of LG Chem. “Once the joint venture is established, LG Chem would receive a stable supply of raw materials needed to enter the bioplastics market in earnest. As a part of our sustainable business strategy, LG Chem plans to accelerate the commercialization of biodegradable resins that can contribute to solving environmental problems such as climate change and waste plastics. As a leading company in sustainability, LG Chem will actively seek new ways to contribute to carbon-neutral growth.”