Cheiljedang to build first amino acid facility in the US (update)

//24 Oct 2011
South Korean Cheiljedang (CJ) is proposing to build a $323 million plant in Webster County (Iowa, USA) where amino acids for animal feeds will be made, in accordance with information from state and local officials.
The proposal from CJ Cheiljedang Corp., doing business as CJ America, was reviewed last week by the Iowa Economic Development Authority Board. That panel will consider awarding millions of dollars worth of state incentives for the project.

If all goes as planned, construction will begin in April 2012 in the North Central Ag Industrial Park west of Fort Dodge. The plant would then begin production in December 2013.

The facility would be the company's first production plant in the United States. The plant would employ 180 people.

Amino acid by fermentation
On the industrial park also a former Tate & Lyle plant is present, now owned by agribusiness giant Cargill, which was a major factor in attracting CJ to come to Webster County. Cargill could supply raw materials, mainly sugars, for the amino acid production process of CJ.

CJ intends to build a plant for producing lysine by “world class fermentation technology” according to the plan description.

The company said in a statement that the output from the Iowa plant with a production capacity of 100,000 tonnes a year will be sold in the United States.

The US lysine market reached 350,000 tonnes in terms of demand volume in 2010, making it the world's third largest following the EU market with 500,000 tonnes and China with 450,000 tonnes.

Market dominance
"We have to target the US market to grab the top position in the global bio-market," CJ CheilJedang CEO Kim Chul-Ha said.

"Starting from the end of 2013, we will devote all our energies to dominating the market through aggressive business and marketing activities."

The global lysine market is estimated at $3 billion with China's Global Bio Chem Technology Group Co Ltd having the largest share while Ajinomoto Co Inc of Japan and CJ CheilJedang share the No. 2 position, followed by Archer-Daniels-Midland Co of the United States, the CJ statement said.

It also said CJ will capture the top position in the global lysine market once the Iowa plant and another lysine facility under construction in Shenyang, China, come on line at the end of 2013 and in the first half of next year, respectively.

The company is poised to continue investing until it achieves an annual capacity of 700,000 tonnes of lysine for animal feed and thus obtains a global market share of 30% by 2014, the statement added.

Methionine
Lysine is manufactured by fermentation technology. Methionine can also be produced by fermentation, but until now no company has a commercial operation for this process. CJ has partnered with French chemical maker Arkema to build the world’s first commercial facilityto produce methionine from renewable sources.

The facility, to be built in Malaysia, will have a capacity of 80,000 tons per year of L-methionine, mostly from plant based materials.

This facility is expected to cost $400 million split equally between the partners and open by the end of 2013.