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SK Global and Zhejiang Satellite to build C2 acrylic acid plant in China

March 17/2021

MOSCOW (MRC) -- South Korean SK Global Chemical (SKGC) has signed a deal with Chinese producer Zhejiang Satellite to build a 40,000 tonne/year ethylene (C2) acrylic acid (EAA) plant at Lianyungang in eastern China, said Chemengonline.

SK Global Chemical (Seoul, South Korea), a subsidiary of SK Innovation, signed an MOU with Chinese company Zhejiang Satellite for the establishment of a joint company that will be responsible for the production and sales of ethylene acrylic acid (EAA), a type of adhesive copolymer.

This joint company will be established this year with the total investment of approximately KRW 200 billion, with six to four contributions of SK Global Chemical and Zhejiang Satellite, respectively. This move is aimed at preoccupying the Chinese and Asian markets through the strategic ties of SK Global Chemicals EAA production technology and sales channels, and Zhejiang Satellites stable source of raw materials.

Ever since the acquisition of the EAA business from Dow Chemical Company in 2017, it had been SK Global Chemicals goal to expand the high value-added packaging material business, mainly in emerging countries in Asia including China. By securing the EAA plant in Lianyungang, China, SK Global Chemical will be able to complete the triangular formation of global high value-added materials production bases in USA, Europe and Asia. Two other EAA plants of SK Global include one in Texas, the U.S., and one in Tarragona, Spain.

SK Global Chemical shared that this strategic investment reflects the surging demand for EAA materials in emerging Asian countries, including China. The packaging materials market for fresh food has been rapidly growing due to the high demand for boxed or delivered foods in China. SK Global Chemicals EAA materials are renowned for their green packaging technologies in the growing fresh food packaging materials market.

Luanyungang, China, the new land for EAA factories, has recently started creating a massive eco-friendly chemical and industrial complex. It is expected to grow into the No. 1 chemical and industrial complex in China. The site has been selected for its advantageous location near the exporting and importing infrastructure and utilities such as the power grid and waste-water disposal, as well as a stable source of ethylene, one of the key ingredients.

As per MRC, SK Global Chemical (SKGC), one of the largest producers of petrochemical products in South Korea, closed its cracking unit No. 1 in Ulsan (Ulsan, South Korea) on a permanent basis on December 8, 2020. According to a letter from the company to its customers, production at this facility with a capacity of 190,000 tonnes of ethylene and 135,000 tonnes of propylene per year will be halted due to unfavorable market conditions. However, SKGC will continue to supply ethylene to its domestic customers from other crackers.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.

SK Global Chemical is a division of SK Group, Korea's first refinery in operation for over 50 years. SK Group has more than 70 thousand employees working in 113 offices around the world. Its largest enterprises produce mainly petrochemical products.

(USD1 = W1,137)


mrcplast.com
Author:Anna Larionova
Tags:PP, PE, ethylene, packaging, SK Corporation, South Korea.
Category:General News
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