Hyundai Oilbank said Thursday it will begin the production of a raw material for solar panels to seek a new growth engine in the renewable energy industry amid sluggish demand for petrochemical products due to the prolonged pandemic.

According to the South Korean refinery, its subsidiary Hyundai Chemical will manufacture 180,000 metric tons of ethylene vinyl acetate at its plant under construction in the Daesan petrochemical complex in South Chungcheong Province, starting in the second half of this year.

EVA film is integrated with solar panels to protect them from adverse weather conditions.

The 2.7 trillion-won ($2.45 billion) plant was initially intended for manufacturing a different material -- low-density polyethylene.

Hyundai Oilbank decided to carve out 180,000 tons from the total production capacity of 300,000 tons for EVA production, as the two materials share a similar manufacturing process. The plant will also produce 850,000 tons of polyethylene and 500,000 tons of polypropylene.

“This is the first time for Hyundai Oilbank to launch a solar panel material business. We will adjust the production of EVA accordingly, depending on the market condition,” a company official said.

Once established, the plant will make Hyundai Oilbank the No. 2 player in the domestic EVA market. Currently, the top four players are Hanwha Total, Hanwha Solutions, LG Chem and Lotte Chemical, respectively equipped with EVA production capacity of 380,000 tons, 166,000 tons, 140,000 tons and 90,000 tons.

By Kim Byung-wook (kbw@heraldcorp.com)