SKC, a chemical manufacturing subsidiary of SK Group, has agreed with Petrochemical Industries Company (PIC) of Kuwait to set up a 1.45 trillion won chemical joint venture. The deal will move SKC one step closer to reaching the goal of producing 1 million tons of propylene oxide (PO).
SKC decided on Aug. 7 to spin off its chemical business division and sell off a 49 percent stake in the new company to PIC for 536 billion won. On the same day, the agreement was signed by SKC president Lee Wan-jae and PIC president Mutlaq Rashid Al-Azmi in the presence of executives from both companies.
PIC is a wholly owned subsidiary of KPC, a state-run oil company of Kuwait which has been in the chemical business for more than 50 years and is making investment in a wide range of petrochemical businesses.
SKC's chemical division produces PO and propylene glycol (PG). It will own SKC's 45 percent stake in hydrogen peroxide manufacturer SKC Evonik Peroxide Korea (SEPK).
SKC has maintained a 100 percent plant utilization rate for over 10 years since it commercialized the world's first eco-friendly PO production method dubbed “HPPO.” SKC has been pushing to increase its PO production to 1 million tons per year by 2025.
The two companies estimated the corporate value of SKC's chemical division at about 1.45 trillion won. They aim to launch the joint venture in the first quarter of 2020 after completing necessary procedures.