First product: renewable propylene glycol
COVINGTON, Ky., and MINNEAPOLIS, May 7 /PRNewswire-FirstCall/ --
Ashland Inc. (NYSE: ASH) and Cargill have agreed in principle to create a
new joint venture devoted solely to the development and production of
biobased chemicals. The parties intend for the new stand-alone entity to
become a leading global supplier of chemicals from renewable sources.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040113/ASHLANDLOGO )
The venture's first product will be propylene glycol (PG). Using both
licensed and proprietary technology, the joint venture will produce
high-grade propylene glycol from glycerin, an abundant co-product of
biodiesel production. The joint venture expects to provide global
manufacturing and marketing of biobased PG, starting with a 65,000 metric
ton-per-year plant at a yet-to-be-finalized location in Europe.
With a 50-50 ownership structure, Cargill and Ashland will bring to the
new venture their unique technology, innovation and expertise in
bioprocessing, along with chemical formulation, supply chain management and
market analysis. The venture anticipates a combined initial capital
investment in the range of $80 million to $100 million. Details on the
name, leadership and development plans are expected to be announced later
in 2007.
"We believe the chemical market has reached a tipping point where
biobased and petroleum-based options are both desired by the market and
practical to produce. To be in a position where Ashland can offer biobased
specialty chemical products in the future, we need to help foster the
creation of biobased basic chemicals now," said Walter Solomon, vice
president and chief growth officer, Ashland Inc. "We are creating our
future and we've found a terrific partner in Cargill to do so."
"For well over a century Cargill has been all about adding value to
products that come from the earth. Developing high-performing chemicals
from renewable sources fits perfectly in that philosophy," said K. Scott
Portnoy, Cargill corporate vice president overseeing its biobased
industrial businesses. "As an industry leader, Ashland is the ideal partner
to help bring these products to market on a commercial scale."
The joint venture will combine the complementary experience and skill
sets of both parent companies. "Cargill's expertise in converting
vegetable-based oils is world-class, its global reach is unmatched and its
glycerin supply chain expertise will promote a quick market rollout. All
this will provide a competitive advantage over other manufacturers
attempting to produce any product derived from vegetable oils," said Dave
Jones, director of bioproducts, Ashland Inc.
"Ashland brings the new joint venture expertise in global chemical
marketplace understanding, formulation and marketing," said Jim Stoppert,
senior director of Industrial Bioproducts for Cargill. "Ashland's
experience in formulating PG into a variety of specialty chemical
applications will lead our efforts to produce a renewable product that is a
seamless, high-grade solution for all PG end use applications."
According to Ashland market consultants, annual global production for
propylene glycol totals more than 1.4 million metric tons, and research
shows that global demand growing at a 3-percent to 7-percent rate.
Propylene glycol is a common ingredient in a variety of resins, lubricants,
cosmetics, paints, detergents and antifreeze. Today, propylene glycol is
produced from propylene oxide, a petroleum-based intermediate.
Laboratory tests of the proprietary production method have shown the
biobased propylene glycol product will feature a high level of purity. In
testing, the process to be used by the joint venture is efficient and
produces fewer byproducts than other alternative approaches to making
renewable propylene glycol.
The Ashland and Cargill joint venture will offer manufacturers who use
propylene glycol alternatives to the current petroleum-based products.
Furthermore, biobased products offer the promise of long-term
sustainability.
Media alert: Ashland and Cargill will hold a news conference to discuss
their planned joint venture on Tuesday, May 8, at the Biotechnology
Industry Organization (BIO) International Convention in Boston. The news
conference starts at 11 a.m. EDT in room 152 on the main level of the
Boston Convention and Exhibition Center. Senior executives from both
companies will provide opening statements and be available to answer
questions.
Ashland Inc., a diversified, global chemical company, provides quality
products, services and solutions to customers in more than 100 countries. A
FORTUNE 500 company, it operates through four wholly owned divisions:
Ashland Performance Materials, Ashland Distribution, Valvoline and Ashland
Water Technologies. To learn more about Ashland, visit http://www.ashland.com.
Cargill is an international provider of food, agricultural and risk
management products and services. With 153,000 employees in 66 countries,
the company is committed to using its knowledge and experience to
collaborate with customers to help them succeed. For more information,
visit http://www.cargill.com.
SOURCE Ashland Inc.
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Related links:
http://www.ashland.com
http://www.cargill.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20040113/ASHLANDLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
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CONTACT:
Ken Gordon, +1-614-790-1832, or
kdgordon@ashland.com, or Bill Brady, +1-952-742-6608, or
bill_brady@cargill.com
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