S Korean petchem firms eye overseas expansion

According to media reports, South Korean petrochemical firms aim to expand their export destinations and build more production facilities overseas in order to decrease their dependence on China.

LG Chem, 60% of exports of which are directed to China, is leading the way in attempts to strengthen presence overseas, especially in North American and European markets. The company also operates plants in Vietnam and Poland.
Another South Korean petrochemicals company, Lotte Chemical Corp. also operates plants in Malaysia and the US. After acquiring the Malaysian petrochemical company, Titan Chemicals Corp. Bhd. in 2010 for $1.2 billion), the company is in efforts to form a joint venture in the US with US chemical firm, Axiall Corp. It also constructed a gas chemical complex in Uzbekistan in 2016.

SK Global Chemical is another company in South Korea, which started a global business with Saudi SABIC last year. In addition to a joint venture naphtha cracker with Sinopec in China, the company also announced that it will acquire Dow Chemical Co.’s ethylene acrylic acid business in the US and Spain as well as the related technologies in order to step into the packaging sector.

South Korea is said to complain about their heavy dependence on the Chinese market and being affected by any problems in China’s businesses. China’s recent boycott of South Korea’s Lotte is also considered to be one of the recent examples of this situation. Forming mergers and joint ventures abroad is expected to reduce this dependency.