SEOUL, SOUTH KOREA & CHICAGO--(BUSINESS WIRE)--
LG Chem (KRX: 051910), a leading global diversified chemical company, and ADM (NYSE: ADM), a global leader in nutrition and biosolutions, today held a signing ceremony launching two joint ventures for U.S. production of lactic acid and polylactic acid to meet growing demand for a wide variety of plant-based products, including bioplastics. Pending final investment decisions, the joint ventures have chosen Decatur, Illinois, U.S., as the location of their intended production facilities.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220815005688/en/
ADM's North American headquarters in Decatur, Illinois. (Photo: Business Wire)
The first joint venture, GreenWise Lactic, would produce up to 150,000 tons of high-purity corn-based lactic acid annually. ADM would be the majority owner of GreenWise, and would contribute fermentation capacity from its Decatur bioproducts facility to the venture. The second joint venture, LG Chem Illinois Biochem, would be majority-owned by LG Chem. It would build upon LG Chem’s expertise in bioplastics to build a facility that will use product from GreenWise Lactic to produce approximately 75,000 tons of polylactic acid (PLA) per year.
ADM CEO Juan R. Luciano stated, “Sustainability is one of the enduring global trends that is powering ADM’s strategy and growth. 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.”
LG Chem Chief Executive Officer Hak Cheol Shin commented, “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,” and added, “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.”
Global demand for lactic acid – which is used broadly in food, feed and cosmetics in addition to industrials like bioplastics – was valued at approximately USD 2.9 billion in 2021, with an expected annual growth rate of 8%. Global demand for bioplastics and biopolymers is projected to grow from USD 10.7 billion in 2021 to USD 29.7 billion by 2026, representing annual growth of 22.7%.
The joint ventures, which are subject to required regulatory approvals, hope to make final investment decisions around the Decatur projects in 2023. Pending final investment decisions and approvals, construction would be targeted to begin in 2023, and production in late 2025 or early 2026, with the two joint ventures supporting more than 125 jobs in the Decatur region.
Both ventures are participating in the State of Illinois’ Economic Development for a Growing Economy (EDGE) program, which provides incentives to job creators who plan to make investments in Illinois.
“I am thrilled that LG Chem and ADM have chosen Decatur as home for their joint ventures,” said Illinois Governor JB Pritzker. “Our state’s talented workforce coupled with our mission of sustainability make Illinois the best place for these lactic and polylactic acid production facilities. To LG Chem and ADM: thank you for your commitment to our state. It is innovative, plant-based solutions like these that will help us tackle the climate crisis head on.”
"When I led a congressional delegation to South Korea earlier this year, I met with the CEO of LG Chem, Hak Cheol Shin, and shared how Illinois is uniquely positioned for greater investment as a growing hub for innovation, manufacturing and technology. I'm proud my advocacy helped bring this important investment to Illinois," said U.S. Senator Tammy Duckworth. “LG Chem recognizes what I’ve long known: Illinois is a great place to do business. Building on ADM's long history in Illinois, I’m glad the leaders at ADM and LG Chem made this decision to help our state lead the transition to a clean energy economy and create good-paying jobs right here so we can help build a better, more sustainable future for communities throughout Illinois. I will continue to spread the message across the country and around the world that entrepreneurs and innovative companies should call Illinois home.”
“Demand for plant-based products is on the rise and it’s no surprise Illinois is attractive to companies looking to expand in this industry,” U.S. Senator Dick Durbin said. “As the federal government seeks opportunities to invest in greener buildings, it will look to states like Illinois that are leaders in the production of eco-products. Today’s news is a positive step and I appreciate the efforts of state and local leaders to bring even more jobs to Illinois.”
"Decatur has a rich heritage in manufacturing products that serve as industry game-changers, and the two ADM and LG Chem ventures announced today are no exception," said Nicole Bateman, president of the Economic Development Corporation of Decatur - Macon County. "Their collective approach to plant-based innovations are a welcomed addition to the global industry leaders who call Decatur home. ADM and LG Chem will find a great partner in the EDC and City of Decatur to support their infrastructure and operational needs to bring this project to life."
Some of the above statements constitute forward-looking statements. ADM’s filings with the SEC provide detailed information on such statements and risks and should be consulted along with this release. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements.
About LG Chem
LG Chem is a leading global chemical company with a diversified business portfolio in the key areas of petrochemicals, advanced materials, and life sciences. The company manufactures a wide range of products from high-value added petrochemicals to renewable plastics, specializing in cutting-edge electronic and battery materials, as well as drugs and vaccines to deliver differentiated solutions for its customers. LG Chem is committed to reaching carbon-neutral growth by 2030 and net-zero emissions by 2050 by managing the impacts of climate change and making positive contributions to society through renewable energy and responsible supply chains. Headquartered in Seoul, Korea, LG Chem has multiple operation sites worldwide and generated KRW 42.7 trillion (USD 37.3 billion) in sales in 2021. For more information, please visit www.lgchem.com.
ADM unlocks the power of nature to enrich the quality of life. We’re a premier global human and animal nutrition company, delivering solutions today with an eye to the future. We’re blazing new trails in health and well-being as our scientists develop groundbreaking products to support healthier living. We’re a cutting-edge innovator leading the way to a new future of plant-based consumer and industrial solutions to replace petroleum-based products. We’re an unmatched agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities. And we’re a leader in sustainability, scaling across entire value chains to help decarbonize our industry and safeguard our planet. From the seed of the idea to the outcome of the solution, we give customers an edge in solving the nutritional and sustainability challenges of today and tomorrow. Learn more at www.adm.com.
Source: Corporate Release
View source version on businesswire.com: https://www.businesswire.com/news/home/20220815005688/en/
Copyright Business Wire 2022