Dow and Mitsui to Create Platform for Biopolymers to Serve Packaging, Hygiene & Medical Markets
Joint Venture in Brazil Advances Dow’s Strategy to Grow in High-Value Specialty Markets and Emerging Regions
Midland, Mich - July 19, 2011
The Dow Chemical Company (NYSE: DOW) and Mitsui & Co., Ltd., of Tokyo, Japan (NASDAQ: MITSY) announced today 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 energy and 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, the global leader in Performance Plastics and 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 and bioenergy, 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.
Dow combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world's most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow's diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2010, Dow had annual sales of $53.7 billion and employed approximately 50,000 people worldwide. The Company's more than 5,000 products are manufactured at 188 sites in 35 countries across the globe. References to "Dow" or the "Company" mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.
Mitsui & Co., Ltd. is one of the world's most diversified comprehensive trading, investment, and service companies. The company has been providing various customers worldwide with integrated solutions which combine advanced functions of marketing, financing, logistics and risk management. As a result, Mitsui has established strong relationships with key customers throughout the world and has accumulated in-depth understanding of business and regions. Headquartered in Tokyo, Mitsui maintains a global network of 151 offices in 66 countries, as well as 461 subsidiaries and associated companies worldwide.
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