Dow-Mitsui Brazilian bioplastics project reveals new investment path for sugarcane

Although not yet a trend, it can be described as an impressive early step with more to come. A joint-venture between U.S. multinational Dow Chemical and Japan’s Mitsui, announced in Brazil on July 19th, will result in the construction of a new sugarcane processing unit dedicated to manufacturing bioplastics and biopolymers. Amounts invested were not disclosed, but each company will have a 50% stake in the new mill, to be located in Santa Victoria, in Minas Gerais state. The cane-based polymers will be utilized in the production of flexible packaging, medical products and toiletries. “What we are seeing is an important product diversification, the use of sugarcane and ethanol in a dedicated unit that will manufacture green polyethylene from renewable fuel instead of naphtha, which is produced from fossil fuels. As the volumes will certainly not be small, the project opens the possibility that other groups will start to focus not only on sugar and ethanol, but also products with higher value-added, as in this case," said Antonio de Padua Rodrigues, technical director of the Brazilian Sugarcane Industry Association (UNICA). Niche market The project is within objectives set by Dow, to develop low-carbon solutions in tune with the global challenges of energy and climate change. "This historic operation reinforces Dow's commitment to invest in the development of sectors that involve high innovation and value through strategic partnerships," said Andrew N. Liveris, Dow chairman and CEO. "The agreement also brings together the strengths of two global companies, creating a unique combination of global technology leadership and access to renewable raw materials to meet the needs of an important and fast-growing region," he added. "Bioplastics are still uncharted territory, and we believe that this niche can expand faster than our expectations," said a Mitsui executive who asked not to be named. Persistency UNICA’s Rodrigues points out that Dow’s insistence was key element in the success of the new venture. "Since 2006 there were already plans to build a dedicated mill with a different partner. Now, the effort got off the ground with Mitsui, a solid company that is capable of providing longevity and consistency to the project,” said the executive. The first phase of the project includes the construction of the new mill, which will process sugarcane into ethanol. Work is expected to begin in the third quarter of 2011.