Dow Chemical, Cargill Form Plastics Venture

Dow Chemical Co. and grain processing giant Cargill said they have formed a joint venture to develop and market a new generation of plastics made from corn, sugar beets and other agricultural resources.

The companies said they will each own 50 per cent of Cargill Dow Polymers LLC, a limited liability company that will produce polylactic acid (PLA) polymers, which can be made to be biodegradable.

The new grain-based plastics will compete with conventional petroleum-based plastics such as polystyrene and can be used in applications such as trash bags that can be composted and bio-degradable food containers, picnic plates, soda bottles and drink lids.

They also can be made in non-biodegradable forms, for use in fibers for rope and fabrics, as well in other products.

Both companies see a huge market for the new PLA plastics: more than one billion pounds a year. In addition to the potential for biodegradability, PLA plastics can be made into finished products more easily and efficiently than some current plastics and are made from renewable resources.

Somebody will buy this polymer because it performs better at an equivalent or lower price than the material they currently use, said James Stoppert, Dows global director of polystyrene issues and development, who will be the ventures president.

Dow and privately held Cargill studied the market and evaluated products and production techniques for 15 months before forming the joint venture.

Cargill is contributing patents and technology, while Dow Chemical brings production and applications expertise and access to a global plastics customer base. Both companies are contributing an undisclosed amount of capital to the venture.

Cargill Dow Polymers will manufacture PLA resins at the former Cargill semi-commercial plant near Minneapolis and plans to double its current 8 million pound capacity for PLA polymers by the end of 1998. About 100 people from both companies are working on the new business.

The venture, based at Dow headquarters in Midland, Mich., also plans to establish a large-scale PLA production facility by 2001. One possible site for the plant is in Blair, Neb., where Cargill is completing a new plant.