LG Chem to Build 'Bio-Plastic' Plant in Illinois, USA with ADM

Construction of 75,000-ton Scale PLA Plant in Yeonsan
PLA Naturally Decomposes Within Months by Microorganisms
First Domestic Integrated Production from Raw Materials to Products
Simultaneous Establishment of LA Production Corporation
"Direct Contribution to Solving Climate Change and Environmental Issues"

Vice Chairman Shin Hak-cheol of LG Chem (left) and Ian Penner, Senior Vice President of ADM, are signing a joint venture establishment agreement and taking a commemorative photo. (Photo by LG Chem)

[Asia Economy Reporter Choi Seoyoon] LG Chem has signed a final contract with ADM (Archer Daniels Midland), the largest grain company in the United States, to establish a biodegradable bioplastic factory.

On the 16th, LG Chem announced that it signed a joint venture agreement for the LA (Lactic Acid) and PLA (Poly Lactic Acid) business with ADM at the LG Chem Magok R&D Campus in Gangseo-gu, Seoul.

This contract follows the signing of a Heads of Agreement (HOA) on key terms by both companies in September last year. ADM is a nutrition company leading the food and beverage, nutrition, and sustainable solutions markets. It has a global agricultural supply chain and grain processing technology and has been collaborating with LG Chem on the development of plant-based bio materials.

The two companies will establish two joint ventures to respond to the demand for plant-based products and bioplastics. The raw material LA production company, GreenWise Lactic, will utilize ADM’s fermentation technology to produce 150,000 tons per year of high-purity corn-based lactic acid.

Based on LG Chem’s bioplastic technology, LG Chem Illinois Biochem will produce 75,000 tons per year of bioplastics using lactic acid from GreenWise Lactic. If the bioplastics produced at this plant were used to make 500ml eco-friendly water bottles, it would be enough to produce about 2.5 billion bottles. The production facility is planned to be completed in 2025 and will be built in Decatur, Illinois, USA. Construction is expected to begin next year after the final review by the boards of both companies.

LG Chem is the first Korean company to build an integrated PLA factory capable of producing from raw materials to products. Through the establishment of the joint venture, LG Chem will secure the capacity to produce high-purity lactic acid necessary for commercial-scale PLA production and will be able to apply bio raw materials to develop various high value-added products.

PLA is a representative biodegradable bioplastic made from lactic acid obtained by fermenting corn. It is harmless to the human body and is mainly used for food containers, straws, water bottles, tableware, and tea bags. PLA naturally decomposes within months by microorganisms under certain conditions, and its greenhouse gas emissions during production are less than one-fourth of those of conventional plastics, making it a sustainable eco-friendly material. The global demand for bioplastics is expected to grow at an average annual rate of 22.7%, from $10.7 billion last year to $29.7 billion in 2026.

Juan Luciano, Chairman of ADM, said, “Sustainability is a global direction that empowers ADM’s strategy and growth. We are pleased to cooperate with LG Chem and will grow together in the plant-based bio solutions market, where demand is rapidly increasing.”

Shin Hak-cheol, Vice Chairman of LG Chem, said, “The establishment of the joint venture is a sustainable growth strategy that can directly contribute to solving environmental issues such as climate change and plastic waste. We will lead the market by responding to the rapidly changing market and customers based on eco-friendly materials, which are one of the new growth engines.”