The Dow Chemical and Mitsui announced the formation of a new joint venture and execution of a Memorandum of Understanding (MOU) aimed at providing innovative and sustainable product solutions to the global high-performance flexible packaging, hygiene
The Dow Chemical and Mitsui announced the
formation of a new joint venture and execution of a Memorandum of Understanding
(MOU) aimed at providing innovative and sustainable product solutions to the
global high-performance flexible packaging, hygiene, and medical markets. This
represents the world's largest biopolymers play and is Dow's largest investment
in Brazil, a country in which Dow has operated successfully for more than 50
years.
"This landmark move underscores Dow's commitment to invest for growth in
high-value, innovation-rich sectors through strategic partnerships," said Andrew
N. Liveris, Dow's Chairman and Chief Executive Officer. "It also combines the
strengths of two global companies, creating the unique combination of
world-leading technology and renewable feedstocks to meet needs in an important,
rapidly growing region of the world. This is right on strategy for Dow and
supports our 2015 Sustainability goals."
Under the terms of the agreement, Mitsui would become a 50% equity interest
partner in Dow's sugar cane growing operation in Santa Vitoria, Minas Gerais,
Brazil. The initial scope of the joint venture includes production of sugar
cane-derived ethanol for use as a renewable feedstock source, bringing new,
biomass-based feedstocks to Dow while diversifying the Company's raw material
streams from traditional fossil fuels. When complete, Dow and Mitsui will have
the world's largest integrated facility for the production of biopolymers made
from renewable, sugar-cane derived ethanol. The project aligns with Dow's goal
of developing low carbon solutions to meet the world's pressing energy and
climate change challenges.
Once fully operational, this platform will be back-integrated into renewable
sugar cane, enabling environmentally sustainable production of high performance
plastics with a reduced carbon footprint. Biopolymers produced at this facility
will be a green alternative and drop-in replacement for the high-performance
flexible packaging, hygiene and medical markets, offering customers the same
performance attributes with a more sustainable environmental profile.
"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 Chief Executive Officer. "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."
The first phase of the project includes the construction of a new
sugarcane-to-ethanol production facility in Santa Vitoria. Construction is
expected to commence in the third quarter of 2011.
"We are invigorated now more than ever about the potential for Dow's sustainable
chemistries in this growth economy," said Pedro Suarez, President of Dow Latin
America. "With Mitsui, we will be fortifying our already strong base for
advancing renewable materials, as well as enhancing the reputations of Dow and
Brazil as worldwide leaders for a green economy."
The transaction is expected to close before the end of 2011, pending the receipt
of certain regulatory approvals. Financial details are not being disclosed.
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