LG Chem has announced plans to develop a new hub for eco-friendly, ESG-based businesses at the Daesan integrated refining and petrochemical complex in Chungnam Province, in South Korea. The company said it plans to build 10 new plants by 2028, a massive project requiring an investment of some KRW 2.6 trillion, or almost EUR 1.9 billion.
“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,” said CEO Hak Cheol Shin.
The first steps have now been completed, with the signing of an investment agreement with Chungnam Province and Seosan City. Under this agreement, LG Chem has secured an additional new site with an area of 790,000 m2, in addition to the existing Daesan Complex site, which will be utilised for the construction of plants and investment in related eco-friendly materials and processes. The company is seeking to attract ESG-based businesses, from bio-based raw material production to eco-friendly materials, waste plastic recycling, and greenhouse gas reduction. However, the investment is also expected to create new jobs for about 400 people through direct employment and will actively contribute to revitalising the local economy.
The project will start with the construction of a 50,000 ton-per-year PBAT plant and a POE with an annual capacity of 100,000 ton. PBAT, or polybutylene adipate-co-terephthalate, although fossil fuel-based, breaks down rapidly in nature under the influence of oxygen, heat, light and enzymatic reactions. It is mainly used in agricultural and disposable film applications. Polyolefin elastomer, known as POE, offers both rubber and plastic properties and is produced using LG Chem's proprietary metallocene catalyst. Its main applications are solar films, in automobile bumpers, as shock-absorbent layers in shoes, electric wire and cable covering material, and more.
LG Chem already operates a POE plant in Daesan, with a current annual capacity of 280,000 tons. The new plant will expand this capacity up to a total of 380,000 tons, making this the second-largest in the world in terms of production capacity.
Both new plants aim to open for commercial production in 2024. The resulting increase in sales is expected to exceed 470 billion Korean won (just over €342 million) per year.
According to the industry, PBAT and POE are expected to continue to grow at an average annual rate of 30% through 2025.
LG Chems’s plans represent a large-scale domestic investment to foster eco-friendly materials in the petrochemical sector, with an aim to initiate transformation of the business structure towards high value-added sustainability businesses and eco-friendly materials.
"This investment not only strengthens our long-standing partnership with Chungnam Province and Seosan City, but also raise the level of cooperation one step further to grow together toward a sustainable future," ended Hak Cheol Shin.