South Korea's petrochemical manufacturers plan to invest 14.4 trillion won (US$12.8 billion) into facilities over the next three years to strengthen their global competitiveness, industry officials said Friday.
The Korea Petrochemical Industry Association (KPIA) outlined the plan in their New Year's meeting. Some of the manufacturers said they will invest in reducing their environmental impact.
The petrochemical industry is one of the largest users of fossil fuels, responsible for releasing large quantities of greenhouse gases into the atmosphere.
For 2010, the companies plan to spend 4.7 trillion won on facility investments. They also raised their target for this year's trade surplus from 19.7 billion won to 29.7 billion, and said they would boost total investment to 5.9 trillion won next year.
Yeochun NCC Co. said it will invest 2.7 trillion won in expanding its ethylene plant, while LG Chem, the nation's leading chemical producer, plans to spend 1 trillion won on lithium-ion battery production.
Hanwha Chemical Corp., a unit of the South Korean family-run conglomerate Hanwha Group, will spend 9 billion won to make solar batteries and solar modules.
SK Energy Co., a unit of SK Group, said it will fully relocate the headquarters of its petrochemical division to Shanghai by 2015. SK reported annual sales of 10.36 trillion won in its petrochemical division last year.
SK Energy eyeing China
SK Energy Co., Korea’s biggest oil refiner, said it started moving the headquarters of its chemicals operations to Shanghai earlier this month as part of a plan to expand its overseas business. The company is also considering spinning off the division, Kim Yong-heum, head of chemicals at SK Energy, told reporters in Seoul yesterday, though he did not provide details.
Korean firms are expanding capacity in China, where economic growth is spurring demand for chemicals. SK Energy is joining China Petroleum & Chemical Corp. to build an ethylene plant in the central Hubei Province.
LG Chem Ltd., the country’s biggest chemical maker, said in July it will jointly invest $370 million with the China National Offshore Oil Corporation to build a petrochemical plant in South China.
China, which is adjacent to Korea, is an ideal place for the company’s globalization strategy, Kim said. Petrochemical accounted for 30 percent of SK Energy’s revenue in the third quarter of last year. Currently, about 1,100 employees work at the company’s petrochemical division.
SK Energy posted 10.36 trillion won ($9.2 billion) in sales by the chemical division at the end of 2008, accounting for 22.6 percent of the company’s revenue.