Dow and Crystalsev's sweet deal.

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The Dow Chemical Company and Crystalsev, one of Brazil's largest ethanol players, have announced plans for a world-scale facility to manufacture polyethylene from sugar cane. Under the terms of a memorandum of understanding, Dow and Crystalsev will create a joint venture in Brazil to design and build the first such integrated facility of its scale in the world.

The plant is expected to start production in 2011 and will have a capacity of 350 kt per year. The venture will combine Dow's leading position in polyethylene with Crystalsev's know-how and experience in producing ethanol from sugar cane. Output from the plant will meet the needs of Dow's customers in Brazil and both companies expect there will be international interest.

"We are excited to partner with a great company like Crystalsev to build the first world-scale polyethylene facility that will use a renewable feedstock," said Andrew Liveris, chair and CEO of Dow.

The new facility will use ethanol derived from sugar cane, an annually renewable resource, to produce ethylene. Ethylene is traditionally produced by cracking petroleum fractions, usually either naphtha or natural gas liquids. It is further expected that the new process will produce significantly less C[O.sub.2] compared to the traditional polyethylene manufacturing process.

The new facility will use Dow's proprietary Solution technology to manufacture Dowlext polyethylene resins--the world's leading linear low-density polyethylene. The material offers significant advantages in a range of different applications, including pipes, films, membranes, and food and specialty packaging.

At a molecular level, the joint venture's product will be identical to the Dowlext polyethylene resins manufactured at other Dow facilities. The advantage of this material versus most renewable resource-based plastics is that customers will be using a drop-in replacement made with renewable resources rather than a different polymer. The sugar cane-based polyethylene would also be fully recyclable using the existing infrastructure for traditional polyethylene products.

Dow Chemical Company