Dow and Crystalsev to Jointly Build the World’s First Ethanol-to-Polyethylene Complex in Brazil

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Researched by Industrial Info Resources (Sugar Land, Texas) – One of Brazil's largest ethanol producers, Crystalsev, and the world's largest producer of polyethylene, the Dow Chemical company (NYSE:DOW ), signed a memorandum of understanding on July 19, 2007, to jointly build a world-scale first chemical complex to manufacture polyethylene, the most widely used of all plastics, from ethanol derived from sugar cane.

Dow, the plastic, chemical and agricultural products manufacturer, has operated in Brazil since 1956 when it established a Latin America headquarters in São Paulo. The Brazilian group Crystalsev commercializes products made from sugar cane and has 1.8 million tons of sugar production capacity per year, which corresponds to 8% of all sugar manufactured in Brazil. The joint venture between both companies will combine Dow's leading position in polyethylene with Crystalsev's experience in ethanol to meet the needs of Dow's customers in Brazil and abroad.

The first ethanol chemical complex, which will use Dow's Solution technology to manufacture Dowlext polyethylene resins, will have 350,000 metric tons processing capacity, planned to be sold primarily in the domestic market, and is to start production in 2011. According to Andrew Liveris, Dow’s CEO, polyethylene made from sugar-based ethanol not only has the same quality and performance properties as the traditionally made polyethylene based on natural gas, but it will also be environmentally sustainable since it will produce significantly less carbon dioxide. Crystalsev and Dow have already begun conducting a feasibility study expected to take one year, to assess engineering design, location, infrastructure needs and supply chain logistics. Both companies are willing to receive approval for the project and the process as a CDM, Clean Development Mechanism developed by the United Nations to help companies manage their carbon credits from emerging market projects. Location and investments for the project are still under evaluation and have not been disclosed yet.

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