LG Chem will invest a total of 2.8 trillion won (US$2.5 billion) to revamp its basic material business.
The company announced on July 23 that it would increase the annual production capacity of the naphtha cracking center (NCC) and polyolefin (PO) facilities in Yeosu by 800,000 tons each. This project will cost 2.6 trillion won.
In addition, the company decided to build a complex in Dangjin, South Chungcheong Province, for mass production of promising materials. It will invest 200 billion won (US$180 million) in this new plant.
The expanded facilities in the Yeosu plant will produce 800,000 tons of naphtha and 800,000 tons of high-value-added PO from the second half of 2021.
In particular, LG Chem plans to secure Korea's No. 1 position by expanding its production capacity (in terms of ethylene production) to 3.3 million tons through NCC expansion at the Yeosu plant. In the case of high value-added PO, the company plans to expand its production capacity to 1.8 million tons by 2022 by going ahead with a switch to a general-purpose product line simultaneously with the expansion of facilities for 800,000 tons.
By doing so, the company plans to become the No.1 in Asia and become one of the top three companies in the world in the high value-added PO sector. To this end, LG Chem is vowing to take an overwhelming advantage over its competitors in terms of production volume and market shares by expanding high value-added PO which accounts for about 50% of its total PO business to 75% by 2022.
LG Chem will continue to expand its vertical integration from basic raw materials such as ethylene to catalysts and final products and expand into the core business in the basic material sector that can generate stable profitability in the future through the expansion of NCCs and production facilities for high value-added PO.
In addition, LG Chem will actively commercialize promising materials to prepare itself for the future. To this end, the company will create a mass production complex for promising materials on a 240,000-square-meter site in the Seokmun National Industrial Complex in Dangjin of South Chungcheong Province.
Promising materials are usually classified into industrial super insulation, light weight, and high-strength materials. LG Chem plans to put a spur to preparing for the development of future materials by investing more than 200 billion won in the mid- to long-term.