S Korea’s LG Chem invests W2.6tr in 10 plants in Chungnam province

SINGAPORE (ICIS)–South Korean producer LG Chem is investing won (W) 2.6tr ($2.2bn) over the next eight years to build 10 new plants that will produce environmentally  friendly materials in Chungnam province.

It has secured an additional 790,000sqm site for the plants, based on an agreement signed with the province and the city of Seosan, the company said in a statement.

“This investment agreement is a part of the sustainable growth strategy and a signal to announce the full-fledged scale-up of the eco-friendly material business,” LG Chem CEO Hak Cheol Shin said.

The project will include plants that will produce 50,000 tonnes/year of polybutylene adipate-co-terephthalate (PBAT) and 100,000 tonnes/year of polyolefin elastomer (POE) for solar films at LG Chem’s Daesan petrochemical complex, it said.

Construction of the two plants will begin this year, with commercial production expected in 2024.

The plants are expected to generate additional sales exceeding W470bn on an annual basis for LG Chem.

“Starting with the construction of PBAT and POE plants this year, LG Chem plans to develop the Daesan Complex as a mecca for ESG [Environmental, Social and (Corporate) Governance]-based businesses, from bio-based raw material production to eco-friendly materials, waste plastic recycling, and greenhouse gas reduction by 2028,” LG Chem said.

PBAT breaks down rapidly in nature through oxygen, heat, light and enzymatic reactions, while POE – a high value-added synthetic resin with both rubber and plastic properties  has high insulation and moisture barrier properties and has superior power generation efficiency, it said.

LG Chem has an existing POE plant in Daesan with a 280,000 tonne/year capacity.

Demand for POE is rapidly increasing for use in films that protect solar panels and minimise power loss, the company said.

Based on industry estimates, PBAT and POE should grow at an average annual rate of 30% until 2025, citing increased demand for perishable plastics and the expansion of new and renewable energy, in line with the ESG trend, it added.

($1 = W1,177)