LG Chem, a global chemical company, and ADM, a nutrition and biosolutions company, have signed a memorandum of understanding to explore US-based production of lactic acid to meet growing demand for a wide variety of plant-based products, including bioplastics.
Under the terms of the agreement, the two companies plan to take steps toward launching a joint venture in early 2022 that would build, own, and operate a US-based facility to produce high-purity corn-based lactic acid on a commercial scale. According to Grand View Research, global demand for lactic acid, which is used broadly in food, feed, and cosmetics, in addition to industrials like bioplastics, was valued at approximately $2.7 billion in 2020, with an expected annual growth rate of 8%.
In addition, the companies will collaborate on a second joint venture that would use lactic acid produced by the first joint venture to produce and commercialize polylactic acid (PLA), a plant-based, biodegradable plastic that can be used in a wide array of products, from food packaging to clothing to upholstery. According to new market research by MarketsandMarkets, demand for global bioplastics and biopolymers is projected to grow from $10.7 billion in 2021 to $29.7 billion by 2026, representing a CAGR of 22.7%.
The two companies also agreed to actively cooperate in the joint development of technology for other biomaterials that can be applied in the biochemical and sustainability sector in the future.
In addition to its use in the production of PLA, the lactic acid produced by the proposed joint venture would be sold for use in a wide variety of food and pharmaceutical applications.
This is not the first time LG Chem and ADM have worked together to meet growing demand for bio-based products. In 2019, the companies signed a joint development agreement (JDA) to secure mass production technology to create biobased acrylic acid, which can be used for the manufacture of superabsorbent polymers used in diapers and other hygiene products.
