LG Chem, GS Caltex form eco-friendly materials alliance

LG Chem Ltd. and GS Caltex Corp. are accelerating their efforts in the eco-friendly bio-material business involving 3-hydroxypropionic acid (3HP). 3HP is an eco-friendly substance produced through microbial fermentation processes and can be used to substitute various disposable plastic materials.

The two companies announced on Friday that they have signed a memorandum of understanding (MOU) for a joint venture for the production of 3HP, a core material for biodegradable plastics and other eco-friendly materials, at LG Chem's Magok R&D campus in Seoul.

According to the agreement, LG Chem will be responsible for developing the 3HP fermentation source technology, while GS Caltex will lead the separation and purification process technology, creating a cooperative business model.

LG Chem and GS Caltex entered into a joint development agreement for the development of 3HP production technology in 2021. After this, they began the construction of a 3HP pilot plant at GS Caltex's Yeosu plant in July last year, which was recently completed.

This plant is set to begin full-scale production in the first quarter of next year. Although there were attempts to develop 3HP technology, there have been no cases of successful commercialization until now. Both companies expect this pilot production to become the world's first commercialized use of 3HP.

LG Chem and GS Caltex plan to comprehensively discuss various collaboration options, including the establishment of a joint venture to expand their cooperative efforts in consideration of future market conditions.

3HP is gaining attention as a next-generation "platform chemical" that can be used as a raw material for various materials such as superabsorbent polymers (SAPs), coatings, adhesives, carbon fibers and more.

"Through the strengthening of our partnership, we will continue to lead in eco-friendly technology," said Shin Hak-cheol, Vice Chairman of LG Chem.

"We will enhance our ESG (environmental, social and governance) capabilities and simultaneously create economic value through the commercialization of high-value-added products," commented Hur Sae-hong, CEO of GS Caltex.

Write to Jae-Fu Kim at hu@hankyung.com