MOSCOW (MRC) -- LG Chem said Sunday (28 Aug 2016) it will focus on high-value petrochemicals in the basic materials business to respond to rising oversupply concerns, reported GV.
The move came amid expectations the nation’s petrochemical industry, which is in an instant boom on the back of a price drop in raw materials, will face fiercer competition as product output is expanding in North America and China despite a global economic slowdown.
"It is important to prepare for an uncertain future earlier than anybody else even when we are thriving,” said Son Ok-dong, president of LG Chem’s Basic Materials Business. “We will do our utmost to build a solid business foundation that can generate results no matter what difficulties."
The nation’s top chemical business pledged to increase the sales of high-value petrochemical products: metallocene polyolefin; highly-functional acrylonitrile, butadiene and styrene; engineering plastic (EP); super-absorbent polymers; and eco-friendly synthetic rubber - to KRW 7 trillion by 2020, up from the current KRW 3 trillion level. To this end, it will invest KRW 400 billion by 2018 to boost production capability of synthetic resins called elastomers. The company also said it will seek to acquire businesses with promising tech companies to strengthen competitiveness in the EP sector.
LG Chem said it will also boost price competitiveness of existing products such as ethylene and propylene. In particular, the company said it is considering expanding production of ethylene to stably supply high-value petrochemicals. It currently is capable of producing 2.2 million tons of ethylene a year.
As MRC informed before, LG Chem Ltd., Korea's leading chemicals and battery maker, said its net profits soared 9.3 percent in the second quarter 2016 from a year earlier thanks to improved petrochemical margins amid low oil prices. Net income came in at 386 billion won (USD338 million) on a consolidated basis in the April-June period, compared with a profit of 353 billion won a year earlier, the company said in a regulatory filing. Operating income advanced 9.3 percent on-year to reach 616 billion won, while sales gained 2.8 percent on-year to 5.27 trillion won.
LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.