08 November 2010 00:30 [Source: ICIS news]
RIO DE JANEIRO (ICIS)--Backward integration into sugarcane will be key to the competitiveness of Dow Chemical’s sugarcane ethanol-based polyethylene (PE) project in Brazil, an executive with the US-based group said on Sunday.
Theresa Kotancheck, vice president for sustainable technologies and innovation sourcing, said the backward integration will enable the project to be competitive compared with PE manufactured from hydrocarbon-based feedstocks.
Ultimately, though, the market will dictate the prices and hence the margins, she told ICIS on the sidelines of the 30th Latin American Petrochemical Association (APLA) annual meeting in Rio de Janeiro.
While the project is not predicated on a price premium for the bio-based PE, “it is likely we will be able to position it as a premium product,” she said.
Dow Brasil research and development director John Biggs said: “The market for the product is already there. The product could be sold a number of times over right now.”
Last month, Brazilian resins producer Braskem started up a sugarcane ethanol-based ethylene plant for the production of “green” PE in Brazil. Braskem has taken a different approach to Dow: its production is not backward integrated into ethanol.
Dow intends to build its 350,000 tonne/year project with an ethanol partner. The company initially planned to build the integrated facility in partnership with Brazilian ethanol producer Crystalsev but that partnership was dissolved last year.
Kotancheck said Dow is currently progressing on the project alone while it tries to find another partner. “We feel confident about the project, which is important for the supply of PE in Latin America,” she stressed.
The company was also developing second generation ethanol technologies using sugarcane bagasse as the biomass. R&D projects of this scale typically have a three to five year cycle, noted Kotanchek.
Sugarcane is the first priority, but the company could also look at other biomass sources such as wood chips, added Biggs.
The APLA conference opened on Sunday with nearly 800 delegates and continues through Tuesday.
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