Lotte Chemical Corporation has entered the petrochemical market in the U.S. for the first time in the domestic industry. The company announced that it held a groundbreaking ceremony for the ethane cracker and ethylene glycol production (EG) facilities in the U.S. on June 14 (local time).
Lotte Chemical and Axiall Corporation finally determined the joint venture structure, including stock ownership ratio and details of the ethylene project, in June 2015 after signing the basic contract for the joint ethane cracker project in February 2014. The stock ratio between Lotte and Axiall is 90:10. Instead, Axiall will retain an option to raise its equity share up to 50 percent within three years after commercial production commences.
Construction will be completed at the end of 2018. The ethylene output of 1 million tons produced in the ethane cracker will be shared by the two partners on halves. Lotte Chemical plans to jointly invest in the EG plant with Mitsubishi with the share of 70:30, and produce 700,000 tons of EG, main materials for synthetic fiber. The joint project will play an important role in helping Lotte Chemical and Lotte Group push into the U.S. market in the future.
Once the joint ethane cracker project is successfully completed, the total ethylene output of Lotte Chemical will significantly increase from the current 2.92 million tons to 3.82 million tons annually.
At the groundbreaking ceremony, Lotte Group Chairman Shin Dong-bin said, “We expect that the joint ethane cracker project in the U.S. will help Lotte Chemical become a leading total chemical firm in the world, beyond Asia. We will keep providing full support to Lotte Chemical in the future so that it can continuously grow into an important pillar of Lotte Group.”