MOSCOW (MRC) -- LG Chem, a South Korean petrochemical major, will be backed by South Korea’s state lenders with USD5 billion in policy loans to finance its expansion in secondary battery factories across the world over the next five years as a part of the government push to promote battery business, according to Kemicalinfo.
LG Chem signed an agreement with Korea Development Bank, Export-Import Bank of Korea, and Nonghyup Bank to scale up secondary battery industry, according to the Financial Services Commission on Monday.
Under the agreement, the three lenders will pool total finance of USD5 billion to back LG Chem’s battery manufacturing expansion across the world from 2020 to 2024. Also, the banks and the battery maker will create a fund worth 150 billion won (USD126 million), which will be used to provide financing to small and medium-sized players as well as collaborate on industry-related research projects.
The Korean government in September organized a team of financial institutions to help local electronics parts and materials makers grow stronger. LG Chem has become the first beneficiary.
Last week, LG Chem announced that the company and General Motors Co will invest USD2.3 billion to build an electric vehicle battery cell joint venture plant in Ohio, which will be one of the world’s largest battery facilities.
Earlier in June, the Korean battery maker entered into another joint venture agreement with China’s top automotive group Geely in the electric car battery business, with each contributing USD87.2 million.
As MRC reported earlier, LG Chem restarted its Deasan cracker following an unplanned outage. The company resumed operations at the cracker on June 18, 2019. The cracker was shut owing to a technical issues on June 8, 2019. Located at Daesan,South Korea, the cracker has an ethylene capacity of 1.27 million mt/year and propylene capacity of 650,000 mt/year.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.
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.
MRC