Dow and Mitsui agree joint venture in Brazil

Dow Chemical Company and Mitsui & Co of Tokyo, Japan, have formed a joint venture in Brazil aimed at serving the global flexible packaging, hygiene and medical markets. The deal is Dow’s largest investment in Brazil, where it has been present for over 50 years.

Andrew N. Liveris, Dow’s chairman and CEO, said: ‘[The deal] 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.’

Under the terms of the agreement, Mitsui becomes a 50 percent equity 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 say they will have the world’s largest integrated facility for the production of biopolymers made from renewable, sugar-cane derived ethanol.

Once operational, the platform will be integrated with renewable sugar cane, enabling environmentally sustainable production of plastics with a reduced carbon footprint.

‘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 CEO. ‘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.

The transaction is expected to close before the end of 2011. Financial details are not being disclosed.