SK Geo Centric Co. announced that it will 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 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.
When its construction is completed, the factory, which has an annual capacity of 40,000 tonnes, is expected to begin operation in the first half of 2025.
Zhejiang Satellite Petrochemical will supply the plant with raw materials, and SK Geo Centric will use its process technology and operational expertise.
“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.”
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.
Through a 2017 acquisition of the EAA business from US chemical manufacturer Dow Inc, it had previously secured EAA factories in Texas, the US, and Tarragona, Spain.
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.
Due to EAA’s superior strength, transparency, and adhesion, demand is rising. The compound increases the stability of batteries for electric vehicles.
Additionally, it is gaining attention as an environmentally friendly material that, through strong adhesion and simple separation, lowers the use of plastic and raises recycling rates.