Global Materials Center

Ultrason, a high-performance thermoplastic produced in Yeosu, Korea by BASF. Ultrason is used in the thin hollow fibers of membranes for water purification systems or in visors for firefighter’s helmets.
Ultrason, a high-performance thermoplastic produced in Yeosu, Korea by BASF. Ultrason is used in the thin hollow fibers of membranes for water purification systems or in visors for firefighter’s helmets.

 

Korea is becoming a global center for environment-friendly materials. The country has many global electronics and automobile companies, and has made Free Trade Agreements (FTAs) with many large markets including the U.S. and Europe, which leads to benefits in tariffs. This is very attractive to both domestic and overseas chemical companies.

According to the industry on August 13, Toray of Japan, the world’s 20th largest chemical company, announced that it will substantially increase Korea businesses at Project Ap-G 2016, a three-year medium-term management task revealed recently.

Among many related projects, Toray plans to raise sales of Green Innovation to 10 trillion won (US$9.7 billion) by 2020 from the 5.915 trillion won (US$5.777 billion) of last year. Water treatment as well as environmentally-friendly and light plastics are included in Green Innovation, and most of those production lines are established in Korea.

There are more investments of global companies as well. The world’s top chemical company, BASF, built and opened a production plant to produce 6,000 tons per annum of Ultrason, a highly functional thermoplastic, in Yeosu early this year. BASF will open an R&D center for electronic materials at Suwon next month. Sabic of Saudi Arabia, the world’s number five company in the chemical industry, also built an R&D center at Sungkyunkwan University. Belgian chemical company Solvay also established an R&D center for electronics and automobile-related materials with Ewha Womans University as well.

Korean companies are also enhancing environmentally-friendly and light materials-related businesses. Samsung combined Samsung SDI, a market leader in secondary batteries for automobiles, and Cheil Industries, a leading material company in the Group, in order to target the market of environmentally-friendly and light automobile materials. LG is also trying to improve market competitiveness though LC Chem and LG Hausys.

SK Innovation is developing “Green Coal” technology, in which carbon monoxide is used to manufacture chemical products, and “GreenPol” technology, in which carbon dioxide is used to manufacture polymers as feedstock for plastics. Another affiliate company, SK Chemicals, is promoting various environmentally-friendly material businesses including “prepreg,” a intermediate process stage of carbon fibers, environmentally-friendly plastics, and bio-degraded plastics.

Hanwha changed the name of its affiliate company Hanwha L&C to Hanwha Advanced Materials, and is investing in the mass production of light plastics with the capital raised through the selloff of its construction materials business.

An industry expert said, “Korea, where cooperation with Samsung Electronics and Hyundai Motors is possible and tariffs are lowered thanks to the FTA, is the best place for chemical companies. If a production facility is built in mainland China, the world’s biggest market, the investment equity portion will be limited, and a risk of technology leakage exists. However, there is no such risk in Korea, and distribution costs are saved as well. Korea is a more advantageous place than China.”

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