Dow, Mitsui form joint venture to produce biopolymers

By Erin Voegele | July 26, 2011

Dow Chemical Co. and Japan-based Mitsui & Co. Ltd. have announced the formation of a joint venture and execution of a Memorandum of Understanding aimed at providing innovative and sustainable biopolymers for use in the high-performance flexible packaging, hygiene and medical markets.

Under the terms of the agreement, Mitsui will become a 50 percent equity interest partner in Dow’s sugarcane growing operation in Santa Vitória Minas Gerais, Brazil. Luis Cirihal, Dow’s business director for Green Alternatives and New Business Development for Latin America, explains that the two companies will jointly manage the venture, and each will have representatives on the joint venture’s board of directors.

According to Dow, the initial scope of the joint venture includes production of sugarcane ethanol, which will be used as a feedstock to produce biopolymers. “This [joint venture] will focus on the production of ethanol from sugarcane, an annually renewable resource,” Cirihal said. “Our aim is that sugarcane-derived ethanol will be used as a renewable energy feedstock source for the production of biopolymers, with ethanol converted into ethylene via a dehydration process.”

The first phase of the project includes construction of a new sugarcane-to-ethanol production facility in Santa Vitória. Construction is scheduled to begin during the third quarter of 2011. According to Cirihal, the first phase of the joint venture is expected to be complete within 24 months of commencement. “The construction of the ethanol-chemical complex is expected to start in the third quarter of 2011 and will begin operations in the second quarter of 2013, already with the production capacity of 240,000 [cubic meters (63 MMgy)],” Cirihal added. “Engineering and design assessments for the ethanol to ethylene and polyethylene production facilities, which would also be part of this integrated facility, are expected to commence in the second half of 2011, aiming to begin construction in 2012. All of this reinforces that both Dow and Mitsui firmly believe in the project to produce biopolymers from a renewable source.”

The transaction between Dow and Mitsui is expected to close before the end of 2011, pending the receipt of certain regulatory approvals. According to Dow, financial details are not being disclosed.

“We are proud to strengthen and grow our already strong partnership with Dow, a company with a proven track record of innovation and market-leading brands,” said Masami Iijima, Mitsui’s president and CEO. “This venture advances Mitsui’s goal to contribute to industry and society by securing a stable supply of renewable resources and providing sustainable solutions from those resources.”