|LG Chem CEO Shin Hak-cheol, right, shakes hands with Archer Daniels Midland (ADM) CEO Juan Luciano after signing a deal at ADM headquarters in Chicago, Monday, to establish a joint venture plant to manufacture bio-plastics. Courtesy of LG Chem|
By Yi Whan-woo
LG has joined hands with Archer Daniels Midland (ADM), a U.S. food processing and commodities trading company, to manufacture bio-plastics from corn, the Korean company announced Tuesday.
It said CEO Shin Hak-cheol and ADM CEO Juan Luciano made an agreement at the American company's headquarters in Chicago, Monday, to establish a joint venture plant in the U.S. to produce lactic acid and polylactic acid-based plastics.
Lactic acid is needed to produce polylactic acid, which is one of the commercially popular types of bio-plastics used in a wide range of products, including food packaging, disposable utensils, clothing and upholstery.
Under the agreement, the two companies will launch a joint venture plant by early 2022, aiming to produce up to 75,000 tons of polylactic acid and lactic acid combined and to sell them by 2025.
The deal makes LG Chem, an LG Group affiliate, the first Korean company to build a polylactic acid plant capable of an integrated process of transforming raw materials into finished goods.
LG Chem will be able to receive a stable supply of high-purity lactic acid as part of its broader plan to accelerate the commercialization of biodegradable chemical products and contribute to the fight against climate change.
"Today's agreement is yet another way in which we're delivering on growth opportunities in plant-based solutions," Luciano said.
Calling LG Chem a "global leader," he said he is "excited to work together" to expand U.S. production of lactic acid.
He expressed hope that the cooperation will help enhance capabilities "to meet growing demand for responsibly-produced products."
Shin viewed the establishment of a joint venture as the "beginning of a new journey," saying it formalizes the cooperation "toward a sustainable business structure for the benefit of the environment and society."
"As a leading company for sustainability, LG Chem will actively seek new ways to contribute to carbon-neutral growth," he said.
LG Chem and ADM have been working together to meet growing demand for bio-based products.
In 2019, the companies signed a joint development agreement to secure mass production technology to create bio-based acrylic acid, which can be used to manufacture superabsorbent polymers used in diapers and other hygiene products.