🏭 The Column: July 18, 2025

Good morning. Today we’re talking about a Cargill joint venture that just started up a new chemical plant in Iowa that will use their corn-based dextrose as a feedstock.

Bio-based Spandex begins in Iowa

What we call “Spandex” is actually an elastomeric polyether-polyurea copolymer invented by DuPont in the late 1950s. DuPont sold the business to Invista in the early 2000s, which in turn sold it to a Chinese private equity firm in 2019. That firm rebranded the company as The LYCRA Company (fun fact: DuPont never marketed it as “Spandex”—they called it Lycra).

Spandex is made by reacting polytetramethylene ether glycol (PTMEG) with methylene diphenyl diisocyanate (MDI). PTMEG is produced by polymerizing tetrahydrofuran (THF), which is made by dehydrating 1,4-butanediol (BDO). And while BDO is produced through a few different routes today, they all currently trace back to petroleum—but that might not be true for much longer.

In the early 2010s, the U.S.-based biotech firm Genomatica began developing a bio-based route to BDO by fermenting dextrose with genetically engineered microbes. By 2016, they had licensed the process to Novamont, which used it to build a 30 KTA plant in northeast Italy. Then, just four years ago, Cargill and HELM formed a joint venture and announced plans to invest $300 million to build a 70 KTA BDO plant adjacent to Cargill’s dextrose production facility in Eddyville, Iowa—based on Genomatica’s process.

That plant in Eddyville is now built and scheduled to be commissioned in the coming months. It’s a big deal. While producing chemicals via dextrose fermentation isn’t new (e.g., all citric and lactic acid is made that way), it’s rare for a grain processor like Cargill to open up an entirely new channel to market for corn. Pulling something like this off usually requires commitment from the downstream value chain—and that’s exactly what happened here: BASF (the world’s largest BDO producer) agreed to purchase bio-based BDO from the site, and The LYCRA Company signed on to work with them.

I’m curious to see how this plays out. The BDO market is currently oversupplied due to excess capacity in China, but perhaps there's enough marketing power at the consumer end of the chain (e.g., Lululemon launching bio-based stretchy clothes?) to justify the higher production costs and lift BDO prices. It's at least compelling enough for Hyosung—the world’s largest Spandex producer—to commit $1 billion to build an even larger facility using Genomatica’s process. [LINK]

Other Things Happened:

Chevron is planning on building a $5bn blue hydrogen and ammonia plant in Port Arthur, Texas. Braskem just received their second ethane carrier so they can ship overseas. Shell and Technip Energies agreed to license their CO2 capture technologies together. A new fertilizer plant will be built in Iraq. More semiconductor-grade polysilicon is coming to Malaysia and Germany. CF Industries started up a CO2 dehydration and compression plant. Arkema is going to triple its production of transparent polyamides in Singapore.