SK buys Dow Chemical's high value-added business

By Park Jae-hyuk

SK Global Chemical has closed in on an acquisition deal for Dow Chemical’s polyvinylidene chloride (PVDC) business, the chemical affiliate of SK Innovation said Monday.

PVDC is a kind of barrier film that prevents moisture and oxygen from decaying or deforming chilled and frozen processed meat products. The barrier film industry is expected to grow further, because of the market’s high barriers to entry and an expected increase in demand in Asia.

SK Global Chemical announced in October it signed a deal to buy Dow Chemical’s PVDC business. After a two-month takeover procedure, the Korean firm could obtain the U.S. company’s manufacturing facility in Michigan, as well as related technologies and intellectual property.

The acquisition was one of SK Global Chemical’s two M&A deals with the U.S. chemical company this year. In September, it finished acquiring Dow Chemical’s unit producing ethylene acrylic acid (EAA), which is used as an adhesive for aluminum and other polar substrates.

Following the two successful deals, SK Global Chemical will produce key elements for multilayer packaging film, including polyethylene, nexlene, EAA and PVDC, so the company is expected to gain the momentum to be one of the global market’s major players.

Starting this year, it has pushed ahead with acquiring high value-added products, choosing automotive materials and packaging as its core businesses. Aiming to develop the affiliate into one of the top 10 global chemical companies by 2024, SK Innovation carried out a reshuffling in August as well.

“Focusing on the packaging and automotive material businesses, we will try to develop technologies to manufacture various products,” SK Global Chemical CEO Kim Hyung-kun said. “Acquiring core materials and technologies through various measures, such as R&D, M&As and joint ventures, we will grow into the top player in overseas markets.”