Dow, Mitsui partner for ethanol-to-biopolymers venture in Brazil

By Kris Bevill | July 21, 2011

The Dow Chemical Company has formed a joint venture with Japan-based investment firm Mitsui & Co. Ltd. to produce sugarcane ethanol and renewable biopolymers at a facility in Brazil. The companies will evenly split the equity interest and co-manage the joint venture, which includes Dow’s sugarcane plantation and harvesting operation in Santa Vitoria, Minas Gerais, Brazil, and a proposed 63 MMgy sugarcane-to-ethanol mill in the same location.

Dow Chairman and CEO Andrew Liveris said the joint venture supports his company’s 2015 sustainability goals, which call for reduced greenhouse gas emissions and energy intensity, increased products created through the use of sustainable chemistry and at least three breakthroughs that will significantly help solve world challenges in energy and climate change, water, food, housing or health. “It also combines the strengths of two global companies, creating the unique combination of world-leading technology and renewable feedstocks to meet needs in an important, rapidly growing region of the world,” he said.

Construction of the ethanol-chemical complex will begin in the third quarter, with full production expected to commence in the second quarter of 2013. Engineering and design assessments for ethanol-to-ethylene and polyethylene production facilities will begin later this year and will undergo construction next year. When complete, the project will be the world’s largest integrated facility for the production of biopolymers from sugarcane ethanol, according to the companies.

While the joint venture will initially produce ethanol, the project’s ultimate focus is on biopolymer production from sugarcane ethanol for use in packaging, hygiene and medical markets because the Latin American flexible packaging market is booming, according to Dow. “At the same time, consumers are increasingly turning to sustainable solutions,” a company spokesperson stated. “For these reasons, we are certain that there is ample market demand and growth potential for biopolymers. Dow does not envision that bio-feedstocks will completely replace traditional feedstocks in the foreseeable future. However, we intend to grow in the bio-feedstocks market as economics make this more feasible.”

“We are invigorated now more than ever about the potential for Dow’s sustainable chemistries in this growth economy,” Pedro Suarez, president of Dow Latin America, said. “With Mitsui, we will be fortifying our already strong base for advancing renewable materials, as well as enhancing the reputations of Dow and Brazil as worldwide leaders for a green economy.”

The two companies have executed a memorandum of understanding for the joint venture and expect the transaction to close by the end of the year. Financial details of the joint venture are not being disclosed.