Lotte spurs globalization with US chemical plant

Lotte Group Chairman Shin Dong-bin answers questions from the press in the U.S. at a groundbreaking ceremony for Lotte Chemicals ethylene production plant in Lake Charles, Louisiana, in this June 14, 2016 photo. He will attend the opening ceremony to celebrate the completion of the production plant on May 9. Yonhap

By Kwak Yeon-soo

Lotte Group Chairman Shin Dong-bin will attend the opening ceremony of Lotte Chemical's ethylene cracker complex (ECC) in the U.S., the group said, Monday.

His attendance shows the chairman's determination to make the group's chemical unit the world's leading chemical company and speed up his group-wide globalization drive.

Shin will deliver a speech at the opening ceremony scheduled on May 9, while many high-ranking officials, including Prime Minister Lee Nak-yon, will attend to celebrate the completion of Lotte's ECC factory.

According to Lotte's petrochemical business unit, the ECC plant in Lake Charles, Louisiana, will go into commercial operation starting June 9.

The company is keen to take advantage of the new plant in the U.S.

Lotte Chemical has invested 4 trillion won, or 90 percent of the plant's financing, over five years.

The ESS plant holds great significance since this is the first time Korea has ever announced such a large-scale investment in a joint project with Axiall Corporation in North America.

When the plant becomes fully operational, it can produce 1 million tons of ethylene and 700,000 tons of ethylene glycol per year using shale gas.

Lotte Chemical will also become the first Asian petrochemical company to enter the shale gas ethane cracker business in North America.

Industry analysts say that the U.S. plant will likely boost Lotte Chemical's annual sales and operating profit by 1 trillion won and 200 billion won, respectively.

“We expect to take a step closer to strengthening global competitiveness by increasing the use of low-cost natural gas, while reducing dependence on naphtha. We will also diversify our production bases,” a Lotte Group official said.

“The upcoming opening ceremony has a special meaning to Chairman Shin as he plans to increase Lotte's global footprint.”

Chairman Shin said the company would invest 20 trillion won in the chemical and construction sector by 2023.

Last December, Lotte Group invested around $3.5 billion in Indonesia's petrochemical plant, which is expected to become the largest plant in Southeast Asia.