LG Chem to build biodegradable plastics factory with Archer Daniels Midland in U.S.
The two companies signed an agreement Tuesday, promising to build a poly lactic acid (PLA) factory and a lactic acid (LA) plant, which is the key ingredient in PLA.
The PLA plant, named LG Chem Illinois Biochem, will be located in Decatur, Illinois, and will produce 75,000 tons of bioplastic per year. That is enough to make 2.5 billion 500-milliliter plastic water bottles.
PLA is biodegradable plastic that can be produced from renewable resources. Its raw material, lactic acid, is derived from corn starch through fermentation. The 100 percent bio-based plastic can be used to make food containers or tableware and takes a few months to naturally decompose.
Specific details about the investment size and breakdown will be announced in the first half of 2023, the company said. Ground will be broken in 2023, with the goal of completing construction in 2025.
When completed, LG Chem will be the first Korean company to build a PLA factory.
"The joint venture is one of our sustainable growth strategies that can directly contribute to solving the environmental issues such as climate change and plastic wastes," said LG Chem CEO Shin Hak-cheol.
Archer Daniels Midland, an agricultural processor and food ingredient provider, has businesses in about 200 countries across the globe. It has the capability to manufacture glucose, the key material in biochemical business and core technology to ferment it.
With global companies constantly moving to go green, demand for biodegradable plastics has been on the rise. The size of the global bio plastics market, which is estimated at 12 trillion won ($10.2 billion) this year, is expected to grow to some 34 trillion won by 2026, according to LG Chem.
BY SARAH CHEA [email@example.com]