At a Price 13 Times the Acquisition Cost
Lotte Chemical will sell off non-core overseas businesses in order to strengthen its high value-added specialty materials business.
The company announced in a public disclosure on Jan. 16 that it will sell off its entire 75.01 percent stake in Lotte Chemical Pakistan Limited (LCPL), a purified terephthalic acid (PTA) production subsidiary in Pakistan, to Lucky Core Industries, a Pakistani chemical company, for approximately 192.4 billion won, 13 times the acquisition price.
Lotte Chemical plans to use the funds secured through the sell-off to upgrade its existing petrochemical products such as PE, PP and PET, and expand the specialty chemical business and advance into the eco-friendly material business.
Lotte Chemical stopped the operation of its PTA line at the Ulsan plant in Korea in the second half of 2020 and has been producing purified isophthalic acid (PIA) through a facility conversion. It has withdrawn from PTA production completely by selling off LCPL to a Pakistani company.
PIA is used as a raw material for PET, paint, and unsaturated resin. Lotte Chemical's annual PIA production stands at 520,000 tons, ranking first in global market share.
Lotte Chemical announced in a press conference held last year that it will boost its sales to 50 trillion won by 2030, with high value-added specialty products and eco-friendly materials accounting for about 30 trillion won.