ADM Scraps Ventures With LG Chem as Construction Costs Rise

By Ilena Peng

Published: July 12, 2024 at 10:29AM EDT

Signage at the Archer-Daniels Midland Co. (ADM) Science and Technology Center in Decatur, Illinois, U.S., on Tuesday, Dec. 3, 2019. The nutrition business was key to the ADM's ability to weather the pandemic. While supply chain disruptions initially hurt many of its commodity rivals, ADM has seen a jump in demand for probiotics and other such products as consumers focus on boosting their immune systems in a virus-stricken world. Photographer: Daniel Acker/Bloomberg (Daniel Acker/Bloomberg)

(Bloomberg) -- Agricultural giant Archer-Daniels-Midland Co. has halted its joint ventures with LG Chem Ltd. to make materials for plant-based products such as bioplastics due to high costs.

Construction costs have “skyrocketed” and the projects “no longer represented a prudent use of our investors’ capital,” Chris Cuddy, president of ADM’s carbohydrate solutions business, said in a Friday statement. The joint ventures were announced in 2022 and had aimed to build facilities in Decatur, Illinois to produce lactic and polylactic acids.

The two ventures are ADM’s majority-owned GreenWise Lactic and LG Chem Illinois Biochem. When announced two years ago, the companies said GreenWise Lactic would produce as much as 150,000 tons of high-purity corn-based lactic acid a year. LG Chem Illinois Biochem aimed to produce approximately 75,000 tons of polylactic acid a year.