LG Chem is investing 2.6 trillion Won (~$2.2 billion) over the next eight years to build 10 new plants that will produce eco-friendly materials at its Daesan petrochemical complex in Chungnam province.
The investment will include plants that will produce 50,000 tonnes per year of polybutylene adipate-co-terephthalate (PBAT) and 100,000 tonnes per year of polyolefin elastomer (POE) for solar films, it said.
The company has secured an additional 790,000 sqm site for the plants, based on an agreement signed with the province and the city of Seosan, the company said in a statement.
“This investment agreement is a part of the sustainable growth strategy and a signal to announce the full-fledged scale-up of the eco-friendly material business,” LG Chem CEO Hak Cheol Shin said.
Construction of the two plants will begin this year, with commercial production expected in 2024.
LG Chem currently has a POE plant with an annual capacity of 280,000 tonne per year in Daesan, and with the new capacity addition the production capacity will reach a total of 380,000 tonne per year. Once completed, the POE plant will become the second largest in the world in terms of production capacity.
The plants are expected to generate additional sales exceeding 470 billion Won (~$400 million) on an annual basis for LG Chem.
PBAT breaks down rapidly in nature through oxygen, heat, light and enzymatic reactions, while POE – a high value-added synthetic resin with both rubber and plastic properties has high insulation and moisture barrier properties and has superior power generation efficiency, it said.
Demand for POE is rapidly increasing for use in films that protect solar panels and minimise power loss, the company said.
Based on industry estimates, PBAT and POE should grow at an average annual rate of 30% until 2025, citing increased demand for perishable plastics and the expansion of new and renewable energy, in line with the ESG trend, it added.