Design News is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Dow & Mitsui Plan Brazil Bioplastics Plant

Dow & Mitsui Plan Brazil Bioplastics Plant

Dow Chemical is joining forces with Japanese trading powerhouse Mitsui to build the largest integrated bioplastics production plant in the world.

Construction on the first phase of the project in Brazil -- a 190,000 metric tons-per-year ethanol mill -- is expected to begin this fall. Ethanol will be made from sugar cane grown on estates already owned by Dow in Santa Vitoria, Brazil. In the first phase of the collaboration, Mitsui is buying half ownership of the sugar cane plantation at a cost of $200 million, according to Reuters. In the next phase, starting in 2012, Dow and Mitsui will build a polyethylene plant.

"The flexible packaging market is currently booming, not only in Brazil but throughout Latin America," Luis Cirihal, Dow's business director for Green Alternatives and New Business Development for Latin America, told Design News. "At the same time, consumers are increasingly turning to sustainable solutions. For these reasons, we are certain that there is ample market demand and growth potential for biopolymers, particularly within the high-performance flexible packaging, hygiene, and medical markets."

The development is fascinating for a number of reasons, particularly because it validates a significant shift in feedstocks from petroleum and natural gas to renewable resources, in this case sugar. Clearly, the volatility of oil pricing is a major concern long-term. The importance of the carbon footprint argument is expected to grow, with increased awareness by consumers and potentially government regulators. Many regulatory bodies in Japan and Europe are already signaling increasing concern over the impact of hydrocarbons on climate change.

Dow's involvement is noteworthy because it is one of the largest producers of plastics in the world. The company has shifted from low-margin commodity plastics in recent years toward specialty chemicals and polymers that command higher prices and leverage Dow's technical capabilities. This announcement clearly signals a strong interest to stay in polyethylene, and the economics are also interesting.

In a speech at the Annual Technical Conference of the Society of Plastics Engineers in 2008, Dow executive vice president and CTO William F. Banholzer said: "The utilization of biofuels as a primary feedstock for production of commodity chemicals will most likely be constrained by a shortage of cropland, limited capital, and the availability of lower-cost alternatives. Absent unforeseen technological innovations or significant government mandates, this situation is unlikely to change on a wholesale basis in coming decades."

The comments were surprising because Dow had announced its first major project to make polyethylene from sugar feedstock in Brazil in 2007. That effort later derailed because of problems at its partner, CrystalSev. The sugar-growing properties announced in the Mitsui deal are the same properties developed for the CrystalSev JV.

In an interview after his Antec presentation, Banholzer told Design News that Dow's plan to make polyethylene from sugarcane in Brazil made sense because the company needed more capacity in South America, and sugar cane was a competitive feedstock in South America.

It would be interesting to see Dow's projections of the economics today. In 2008, Bahnholzer said: "For corn ethanol to compete with Middle East ethane on an energy basis, it would have to sell for a mere $0.15/gal. Ethanol from corn costs about $1.74 per gallon to produce." No data is available on what the cost will be for sugar ethanol produced in Brazil. According to the Soybean and Corn Adviser, the average price of ethanol in Brazil at the pump is R$2.22 per liter, or approximately $5.27 per gallon. Dow's cost, of course, would be less because there are no distribution costs and no middlemen.

Plastics made from the Dow-Mitsui plant will be chemically identical to plastics made from hydrocarbon feedstocks. They will not be biodegradable. Plastic soda bottles made from sugar-derived polyester are already making a big splash, with the key players being Braskem and Coca-Cola. Most bioplastics made in the US are polymerized from corn and have chemical properties different from well-known types of plastics.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish