MOSCOW (MRC) -- South Korea’s Lotte Chemical Corp. has acquired a 4.46 percent stake in Japanese peer Showa Denko K. K. in a bid for future growth, said Chemweek.
The share purchase worth 161.7 billion won (USD132 million) was carried out in two phases between March and April, Lotte Chemical said.
A Showa Denko spokesperson declined to comment on the deal.
Showa Denko completed their planned acquisition of an 87.61 percent stake in Hitachi Chemical Co., a Japanese chemical giant, for about 845 billion yen (USD7.9 billion) through a tender offer on April 20.
The South Korean firm had bid for negotiation rights for the sale of Hitachi Chemical by its parent conglomerate Hitachi Ltd., according to a Yonhap News report.
Lotte Group Chairman Shin Dong Bin said at a board meeting on Wednesday that the group needs to collectively invest in fields in which it can achieve future growth, the report said.
As MRC informed earlier, Lotte Chemical Titan might carry out a scheduled turnaround at its No. 1 cracker in Malaysia in 2021. No further details on the exact time period is revealed at the moment. The previous news reported that the company might shut down the No. 1 cracker with a capacity of 285,000 tonnes of ethylene per year and polyethylene (PE) 1 in June 2020 for 35 days overhaul.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.
Lotte Chemical Titan produces Malaysia's most comprehensive portfolio of olefins and polyolefins which contribute to the enhancement of everyday life. Lotte Chemical Titan's production site in Malaysia consists of eleven process facilities, two co-generation plants and three tank farms. They are located on 2 sites in Pasir Gudang and Tanjung Langsat in the state of Johor. In 2006, Lotte Chemical Titan acquired PT Lotte Chemical Titan Nusantara, Indonesia’s first and largest polyethylene plant in the country. This acquisition boosted the polyolefins capacity by approximately 50%, thus making the company one of the largest producers in South East Asia. Lotte Chemical Titan was acquired by Lotte Chemical Corp., forming part of the Lotte conglomerate of Korea, in 2010. The company thus became one of Lotte Chemical Corp.’s largest overseas subsidiaries.