FAR EAST: Korean petrochemical companies moving overseas in droves

SK Innovation said on 24 June it is waiting for final approval from the Chinese authorities for its 800,000-ton ethylene plant being built in Wuhan, Hubei Province. Established jointly by SK Chem, SK Innovation's subsidiary, and China's state-run China Petroleum & Chemical Corp. (Sinopec), the plant has been completed in December last year and is undergoing pilot operations. Elsewhere in Chongqing in the southwest, SK Chem is also building an integrated refinery complex jointly with BP for butanediol, acetate, and ammonia.

LG Chem, Korea's No. 1 chemical producer, has steadily increased its output in China to a level as high as 40 percent of its total sales revenue worldwide. Its synthetic rubber plant in Tianjin, established at the end of 2010, has a capacity of 60,000 tons. The same Tianjin plant also produces polyvinyl chloride.

Kumho Petrochemical established last year a joint venture in Chongqing to produce an additive for rubber products including tires. Hanwha Chemical is currently running a polyvinyl chloride plant in Ningbo, Zhejiang Province.

Park Jae-chul, analyst with KB Investment & Securities, said, "Previously most Korean petrochemical companies were wary of moving their production bases overseas for fear of technology outflow. But now they are aggressive in going overseas after realizing the domestic market is over-saturated. Their favoured destination has also expanded toward Central Asia and Southeast Asia from China."

Source: "The Korea Economic Daily", Seoul; 25 June 2013

(Syed Rashid Ali, Karachi, Pakistan)