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Hanwha to raise $503 mn to expand China PVC production

Aims to increase presence in global PVC market with better price competitiveness than Chinese makers

By Oct 08, 2021 (Gmt+09:00)

Hanwha Chemical Ningbo’s PVC plant (Courtesy of Hanwha Solutions)
Hanwha Chemical Ningbo’s PVC plant (Courtesy of Hanwha Solutions)

South Korea’s Hanwha Solutions Corp. is set to raise $503 million to expand its polyvinyl chloride (PVC) business in China, the world’s largest producer.

The energy unit of chemicals-to-financial conglomerate Hanwha Group aims to increase its presence in the sector with its price competitiveness compared to Chinese peers as the global demand is recovering.

Hanwha Solution signed a memorandum of understanding with Heimdall Private Equity Partners, a new South Korean PE firm, on a stake sale of Hanwha Solutions’ Chinese PVC production unit. Hanwha Solution manufactures PVC through Hanwha Chemical Ningbo Co., a wholly-owned subsidiary.

Hanwha Solutions plans to set up a special purpose company (SPC) in South Korea and transfer the 100% stake in the Chinese subsidiary to the SPC. After that, Hanwha Solutions will sell a 49% stake in the SOC to Heimdall to raise 600 billion won ($502.5 million). Hanwha Chemical Ningbo logged a net profit of 60 billion won with sales of 400 billion won last year.

Hanwha Solutions will spend the proceeds to expand PVC production capacity in China. PVC is a plastic raw material used in a various applications in the building and construction, health care, electronics, automobile and other industries. About 70% of global PVC demand comes from the construction sector.

The global PVC demand had tumbled in the first half due to the outbreak of the COVID-19, pushing down its prices. But they have quickly reversed the course since the second half on a recovery in US and European housing markets as well as increasing investment in infrastructures by major countries to boost their economies.


Hanwha Solutions’ PVC products are much more price competitive than one manufactured by other Chinese companies. Hanwha Solutions produces PVC through the ethylene dichloride (EDC) process, in which ethylene is reacted with chlorine. Hanwha Solutions use ethylene from its group affiliates such as Hanwha Total Petrochemical Co.

On the other hand, most Chinese PVC makers use the carbide process, in which acetylene produced from coal is reacted with chlorine, losing price competitiveness due to the recent surge in coal prices.

Hanwha Group established a PVC plant in 2010 with an annual capacity of 300,000 tons in Ningbo. The group, which started PVC production in 1966, is a leader in South Korea’s PVC industry with a 49% market shares. Hanwha Solutions’ total PVC production capacity is 1.43 million tons.

Write to Jun-ho Cha at

Jongwoo Chen edited this article.

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