Projects: Kuraray to cut MMA capacity due to oversupply/high costs, ADM/LG Chem cancel bioplastics plant in US due to high costs

Japan’s Kuraray Co. has announced its decision to optimise the production capacity of its methacrylic resin business’ methyl methacrylate (MMA) plant. The company says it will cut by half capacity of its 67,000 tonnes/year MMA plant at Niigata, Japan, by in mid-2025. It also announced that the production and sales volumes for MMA and some other downstream products, including production of ammonium sulphate and methacrylic resin moulding materials, will be reduced from July 2025 as a result of this change.

But it adds that there will be no changes for MAA and methacrylic resin sheet.

Since 1959, Kuraray’s Niigata plant has been manufacturing MMA and methacrylic resins and other such products that are downstream in the methacrylate chain. In recent years, however, the competitive structure of the market has deteriorated due to changes resulting in an ongoing oversupply. At the same time, maintenance and renewal costs have increased due to the aging of facilities, making the business environment more challenging.

To secure profitable business continuity and a stable supply of products into the future, it adds that it has “come to the conclusion that it is essential to strengthen competitiveness by optimising the product mix by reducing production capacity while bringing down the cost of facility antiaging measures”.

Meanwhile in other news, US-based ADM and South Korea’s LG Chem have announced that their previously announced projects for the production of lactic and polylactic acid will not move forward.

“Since we originally announced our two joint ventures with LG Chem for lactic and polylactic acid in 2022, construction costs have skyrocketed,” said Chris Cuddy, president of ADM’s Carbohydrate Solutions business.

“We looked at a variety of options, but when the time came to make final investment decisions, it had become clear that these projects no longer represented a prudent use of our investors’ capital that would meet our returns objectives,” he added.

Cuddy also said ADM would continue to expand its biosolutions portfolio to meet growing demand for sustainably sourced solutions.

The two joint ventures include GreenWise Lactic, of which ADM is a majority owner, and LG Chem Illinois Biochem, which is majority-owned by LG Chem for a new facility that would have used lactic acid from the GreenWise venture to produce about 75,000 tonnes/year of polylactic acid.

Production at the new plant was originally set to launch in late 2025 or early 2026, according to the companies.

Lactic acid is used in food, feed and cosmetics, as well as in bioplastics. As of 2021, that market was valued at around US$2.9 billion with an expected annual growth rate of about 8%.

Global demand for bioplastics and biopolymers was projected to grow from about US$10.7 billion in 2021 to US$29.7 billion by 2026, according to the companies.

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