Aekyung Chemical acquires LG Chem Vietnam's plasticizer subsidiary

South Korean consumer goods company Aekyung Chemical announced on Friday that it has acquired VPCHEM, the Vietnam subsidiary of LG Chem Ltd., a company engaged in the production and sale of plasticizers. Aekyung Chemical has acquired a 50% stake in VPCHEM held by LG Chem.

Plasticizers are additives that facilitate the molding and processing of plastics, including polyvinyl chloride (PVC), commonly used in applications such as wallpaper, flooring and wires.

The Vietnamese domestic market is expected to grow by 3.7% annually, driven by the expansion of specialized applications for plasticizers due to industrial development and improved income levels.

Through the acquisition of VPCHEM, the sole plasticizer manufacturing facility in Vietnam, Aekyung Chemical has increased its annual plasticizer production capacity from the existing 550,000 tons (400,000 tons in Korea and 150,000 tons in China) to 660,000 tons.

Aekyung Chemical explained that the latest acquisition enables it to strategically produce and supply environmentally friendly plasticizers for North American and European customers, while manufacturing general-purpose and functional plasticizers for China and Vietnam, allowing for strategic choices and concentration.

"The acquisition of VPCHEM equities is meaningful in further solidifying the foundation for the enhancement strategy of the company's core plasticizer business," said Pyo Kyoung-won, CEO of Aekyung Chemical.

"We will efficiently operate VPCHEM, maximizing synergy among global production bases to allow the plasticizer business to take a new leap forward," he added.

Write to Mi-Sun Kang at misunny@hankyung.com