By Yoon Sung-won
LG Chem will invest $100 million to expand manufacturing capacity of durable plastic at its Huanan factory in Guangdong, southeastern China, the Korean chemical maker said Monday.
LG Chem said it will increase manufacture of high value-added acrylonitrile-butadiene-styrene (ABS) by 150,000 tons per year.
Added to 900,000 tons of ABS production capacity at a factory here in Yeosu, South Jeolla Province, and another 800,000 tons at its Ningbo plant in China, the Huanan factory is expected to produce 300,000 tons of ABS a year by 2018, boosting LG Chem’s annual production by 2 million tons. The company expects this will help increase its global ABS market share to 26 percent by 2018, up from 21 percent now.
“By maximizing our international brand awareness and our differentiated technical services in the ABS sector, we will strengthen our dominance in China’s largest Huanan market,” said Son Ok-dong, president of LG Chem’s Basic Materials Business, in a statement. “We will also utilize the facility as an advance base for the newly emerging Southeast Asian markets to solidify our top position in the industry.”
ABS, which is one of the most popular high value-added plastic synthetic resin products, is highly thermostable and crashworthy and thus is widely used as a key material for car and electronics.
Currrently, China takes more than 50 percent of global ABS demand. In particular, more than half the country’s total ABS demand comes from the Huanan area, according to the company.
In 2008, LG Chem established a joint venture with China’s state-run petroleum and natural gas provider China National Offshore Oil Corp. The company said the extra investment in the Huanan factory will increase its stake in the joint corporation by 70 percent, up from the current 50 percent.
LG Chem said its annual sales will expand by 700 billion won once the expanded manufacturing facilities go online.
“The expansion of the Huanan ABS factory means much to us as it will lead not only to an increase of manufacturing scale but also will help us strengthen our business control over the joint corporation,” Son said.
The company said it has recently increased ethylene production by 230,000 tons at the Naphtha Cracking Center in its plant in Daesan, South Chungcheong Province. It also modified its manufacturing facilities for polystyrene, which has been oversupplied in the market, to produce ABS products, aiming at boosting profitability in the basic materials business.