SK Geo Centric to build high value-added material plant in China

South Korea’s major petrochemical company SK Geo Centric Co. is set to build an ethylene acrylic acid (EAA) plant in China with a local partner as it aims to expand the eco-friendly and high-value-added packaging material business in Asia.

SK Geo Centric, formerly known as SK Global Chemical, said it signed on Monday a deal to establish a joint venture with Zhejiang Satellite Petrochemical Co. The JV, in which SK Geo Centric holds a 60% stake, plans to invest 290 billion won ($222.2 million) to build an EAA plant in Lianyungang in Jiangsu province.

The factory with an annual capacity of 40,000 tons is scheduled to start commercial operations in the first half of 2025 when its construction is completed. Zhejiang Satellite Petrochemical will provide raw materials to the plant, while SK Geo Centric is poised to utilize its process technology and operation know-how.

“We target demand in Asia, including China, with the only EAA plant in the mainland,” said SK Geo Centric CEO Na Kyung-soo in a statement. “We will also become a global eco-friendly chemical material producer through SK Geo Centric’s technologies and marketing capabilities in Asia.”

MULLS CAPACITY EXPANSOINS

The company, wholly owned by SK Innovation Co., considers expanding EAA production capacity in China or other countries in Asia depending on growth in businesses related to the material to meet regional demand.

It already secured EAA plants in Texas, the US, and Tarragona, Spain, through an acquisition of the EAA business from US chemical maker Dow Inc in 2017.

SK Geo Centric is one of four global major chemicals producers that account for about 80% of the global supply of EAA, which requires high technologies for production.

Demand for EAA is growing thanks to its excellent durability, transparency and adhesion. The material improves electric vehicle battery’s stability. In addition, it is in the spotlight as an eco-friendly material that reduces plastic use and increases recycling rates through strong adhesion and ease of separation.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jongwoo Cheon edited this article.