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South Korean chemicals firm LG Chem said Sunday it will invest 287 billion won ($253 milllion) over the next three years to raise the ethylene production capacity of its naphtha cracking center by 230,000 tons.
The ethylene production capacity of LG Chem’s naphtha plant in Daesan of South Chungcheong Province will increase to 1.27 million tons, the largest production in the world as a single production facility, the firm said.
LG Chem’s expanded Daesan plant, together with an additional naphtha cracking center based in Yeosu, will push up LG Chem’s net ethylene production capabilities to 2.43 million tons, the biggest in Korea.
The firm’s decision to enlarge its naphtha cracking capabilities came as part of efforts to secure a stable supply of base materials for expanding its specialty chemicals business, it said.
Ethylene and propylene -- produced by processing naphtha, a by-product of refining crude oil -- are basic materials used to produce various petrochemical products.
To prepare for increasing competition in the global petrochemicals market, LG Chem plans to double its sales of specialty chemicals such as its self-developed polyolefin products, acrylonitrile butadiene styrene and engineering plastics to 7 trillion won ($6.2 billion) by 2020.
As part of such efforts, LG Chem has already invested some 400 billion won into driving up its elastomer production capacity by 290,000 tons by 2018. Elastomers refer to a specialty chemical that combines the properties of rubber and plastic.
It also plans to double the specialty chemicals portion of its net polyolefin production from the current 30 percent to 60 percent by 2020, among similar production hikes for its alternative high-value chemicals.
By Sohn Ji-young (jys@heraldcorp.com)
