Dow and Mitsui to Create Platform for Biopolymers to Serve Packaging, Hygiene & Medical Markets

Joint venture in Brazil ddvances Dow’s strategy to grow in high-value specialty markets and emerging regions.

Jul 22 2011 --- The Dow Chemical Company and Mitsui & Co., Ltd., of Tokyo, Japan 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 Vitória, 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 Vitória. 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.