LINCOLN, Neb. (DTN) -- Archer Daniels Midland launched two joint ventures this week to expand the market for corn in Illinois and take advantage of a growing market for bioplastics and other plant-based products.
ADM signed on to a joint venture with GreenWise called GreenWise Lactic. Through that agreement, the companies expect to produce up to 150,000 tons of corn-based lactic acid annually, according to a news release from ADM.
ADM would be the majority owner of GreenWise and would contribute to the venture fermentation capacity from its Decatur, Illinois, bioproducts plant.
In addition, ADM signed on to a joint venture with Korea-based LG Chem to form LG Chem Illinois Biochem. LG Chem is expected to be the majority owner in the venture to build a polylactic acid plant that will use product from GreenWise Lactic to produce about 75,000 tons per year.
Global demand for lactic acid was valued at about $2.9 billion in 2021, with an expected annual growth rate of 8%, according to the news release.
Lactic acid is used in food, feed and cosmetics in addition to industrials like bioplastics. Global demand for bioplastics and biopolymers is projected to grow from $10.7 billion in 2021 to $29.7 billion by 2026, at an annual growth rate of 22.7%.
The companies said in the news release the ventures are subject to state regulatory approvals and that "final investment decisions" on the Decatur projects would be made in 2023.
Construction would be targeted to begin in 2023, and production would launch in late 2025 or early 2026, according to the news release. In total, the joint ventures are expected to support more than 125 jobs in the Decatur region.
Both ventures are participating in the state of Illinois' Economic Development for a Growing Economy program, which provides incentives to job creators who plan to make investments in Illinois.
"Sustainability is one of the enduring global trends that is powering ADM's strategy and growth," ADM CEO Juan R. Luciano said in a statement.
"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."
ADM's BioSolutions segment already has experienced $136 million in year-over-year revenue growth in the first half of 2022, according to the company. LG Chem is a company that manufactures a wide range of products from high-value-added petrochemicals to renewable plastics, specializing in electronic and battery materials, as well as drugs and vaccines.
"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," Luciano said.
"I am thrilled that LG Chem and ADM have chosen Decatur as home for their joint ventures," Illinois Gov. JB Pritzker said in the news release.
"Our state's talented workforce coupled with our mission of sustainability make Illinois the best place for these lactic and polylactic acid production facilities."
LG Chem CEO Hak Cheol Shin said the ventures are part of a strategy to solve environmental issues, including climate change and managing waste plastics.
"With the establishment of this JV, LG Chem will not only procure production capacities for highly pure lactic acid needed for commercial-scale PLA (polylactic acid) production but will also be able to apply biomaterials in the development of various high-value-added products," he said.
Illinois Democratic Sens. Richard Durbin and Tammy Duckworth said the ventures will help build a clean-energy economy.
"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," Durbin said in a statement.
"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."
Duckworth said, "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."
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