Ashland Inc. and Cargill have joined forces in a new $80 million to $100 million joint venture to develop and produce biobased chemicals, with plans for a European plant that will produce propylene glycol from glycerin, a by-product of biodiesel production.
Jim Stoppert, senior director of industrial bioproducts for Cargill, said Europe, which has mandated biodiesel through legislation, is well ahead of the United States in biodiesel capacity. There is probably double the biodiesel capacity Europe than there is in the U.S., which means double the excess glycerin capacity, Stoppert told Lube Report.
He said the companies expect the biobased plant will be able to produce propylene glycol for less than it costs to produce it via hydrocarbon feedstock. For the hydrocarbon alternative, first they produce propylene, then they produce propylene oxide, and then propylene glycol, Stoppert explained. So its fairly expensive from a capital standpoint. Were just taking glycerin, which already is a by-product from the biodiesel process and just running the process to get the propylene glycol from it.
The joint venture will buy glycerin on the open market, according to Stoppert. Some of that will be from Cargill biodiesel plants, but also from other biodiesel plants as well, he said. Last year Cargill itself opened two glycerin plants in Europe, in Salzgitter and Frankfurt, Germany.
Stoppert said the company looks for opportunities where it can use its strength in ag-based or renewable feedstock-based products to develop new businesses. In addition, we look for unique technology that we can either develop ourselves or that we can get exclusive access to, he said. Stoppert said Cargill also looks for partners because it doesnt seek to be a chemical company.
Well really be the first biobased propylene glycol out there – weve heard a lot of other people talk about it, but I dont think anyone else is as far along in their thinking, he said.
Ashland spokesman Ken Gordon said the joint venture grew from the two companies having complimentary fields of expertise. Cargill has proven knowledge and understanding of biobased materials, and they have a number of biodiesel production facilities, Gordon said. At Ashland, on the other hand, we have tremendous depth and knowledge in the specialty chemicals arena. It made sense to pool those abilities and come together in a joint venture.
The joint venture anticipates a combined initial capital investment of $80 million to $100 million. Out of that pool of funds, property will be purchased, the building will be constructed, and equipment and assets purchased, Ashlands Gordon added.
Stoppert said that Cargill has a number of sites in Europe, and that the location for the plant most likely will be at a Cargill site. Were well into engineering the plant, and hopefully be in a position to break ground in a late summer or early fall time frame, he said.
According to Minneapolis-based Cargill, the biobased plant will give manufacturers alternatives to help alleviate propylene glycol supply constraints and price fluctuation as the global market for the chemical continues to grow. Cargill has experience in converting vegetable oils, using licensed and proprietary technology, to convert glycerin to propylene. The companies claim that the joint ventures manufacturing plant will yield a high-grade product suitable for use in virtually all propylene glycol applications with no reformulation or change in current manufacturing processes.
Propylene glycol is a common ingredient in resins, cosmetics, paints, detergents and antifreeze. It is also used for production of polyglycols for use in hydraulic and brake systems to provide lubricity and anti-freezing protection, and to help reduce swelling of rubber parts.
Cargill bills itself as one of the largest producers of ethanol and biodiesel in the United States. It manufactures ethanol at two production facilities in Eddyville, Iowa, and Blair, Nebraska. The company makes biodiesel from a facility it opened in May 2006 in Iowa Falls, Iowa.