Lotte Chem to raise sales 65% with more advanced materials

LAS VEGAS -- South Korea’s Lotte Chemical Corp. seeks to ramp up sales 65% in nearly 30 years by increasing production of advanced materials, while the petrochemical manufacturer is shifting its business focus to eco-friendly sectors.

Lotte Chemical aims to increase sales to 30 trillion won ($24.1 billion) by 2050, Vice Chairman and CEO Kim Gyo-Hyun said on Jan. 7 at CES 2023 in Las Vegas. The company reported sales of 18.1 trillion won on a consolidated basis in 2021.

“We are enhancing research and development of high value-added products such as high-clarity polypropylene and other medical materials,” Kim said at the most influential tech event in the world, in which the company participated for the first time. “We will ramp up the output proportion of specialty advanced materials, which have no price competition with China, to 100% by 2030 from the current around 60%.”

The company suffered losses in the July-September period for a second straight quarter on falling ethylene prices amid a slowing global economy and intensifying competition.

CCU USING GAS SEPARATING MEMBRANES

Lotte Chemical is the country’s first petrochemical maker that is applying carbon capture utilization (CCU) technology using gas separating membranes. The technology is more economical and causes less pollution than those of the existing dry and wet capturing.

“We are making blue monoethylene glycol (MEG), a net-zero raw material, with the CCU technology from the production stage of MEG, a raw material for petrochemicals,” Kim said.

Lotte Chemical March 2021 installed CCU pilot facilities at its Yeosu complex, about 350 kilometers south of Seoul, and completed verification of the equipment with the gas separating membranes. The company seeks to build the facilities at its Daesan complex in the country.

Kim said the acquisition of Iljin Materials Co., the world’s fourth-largest copper foil producer, allowed Lotte Chemical to cover most materials businesses.

“We became an assortment in the secondary battery materials industry,” he said.

He tried to alleviate concerns over the potential deterioration in Lotte Chemical’s financial stability.

“We already set up plans on how to manage funds when we decided on the takeover,” he said. “A rights offering was also in the scenario.”

The company decided on a rights offering for 1.1 trillion won from existing shareholders to fund the deal and help the construction unit of Lotte Group, South Korea’s fifth-largest conglomerate.

Write to Jeong Min Nam at peux@hankyung.com
Jongwoo Cheon edited this article.