By Marilyn Gerlach

Chemical maker LG Chem (Seoul, South Korea; www.lgchem.com) and US agricultural and biotech group Archer Daniels Midland (ADM, Decatur, Illinois; www.adm.com) said they would no longer proceed with their previously announced joint projects for the production of lactic and polylactic acid. A joint statement blamed the rising costs of construction for scrapping the projects. 

“Since we originally announced our two joint ventures with LG Chem for lactic and polylactic acid in 2022, construction costs have skyrocketed,” said Chris Cuddy, president of ADM’s Carbohydrate Solutions business. 

“We looked at a variety of options, but when the time came to make final investment decisions, it had become clear that these projects no longer represented a prudent use of our investors’ capital that would meet our returns objectives,” he said. 

ADM said it was still committed to leading in the decarbonization of the industries in which it participates, and would continue to expand its biosolutions portfolio to meet growing demand for sustainably sourced solutions. 

The collaboration between ADM and the South Korean chemical company was first announced in September 2021, culminating in the establishment of two joint ventures in August 2022. A final investment decision was to be made in 2023, with production planned to start in 2025.

The projects were meant to meet growing demand for a variety of plant-based products that include bioplastics. The intended production facilities of the two joint ventures were in ADM’s hometown of Decatur.

The first joint venture is GreenWise Lactic, of which ADM is a majority owner. It was to produce up to 150,000 t/y of high-purity corn-based lactic acid. ADM would have contributed fermentation capacity from its Decatur bioplastics facilities to the project.

The second joint venture is LG Chem Illinois Biochem, which is majority owned by the Seoul-based company. It would have built a facility that would have used the products from GreenWise Lactic to produce around 75,000 t/y of PLA.

According to construction and cost management consultant Currie & Brown (London; www.curriebrown.com), US construction costs were expected to rise 3%-6% this year.