SK Global chemical Co., an affiliate of South Korea’s top refiner SK Innovation Co., said Sunday it will build a packaging material plant in China.
Under the deal, SK Global chemical will set up a joint venture with Satellite Petrochemical to build a plant that produces ethylene acrylic acid (EAA), a high-end eco-friendly material used for packaging.
The plant, to be in Lianyungang, Jiangsu Province, eastern China, will be able to churn out 40,000 tons of EAA a year, according to the company.
The two sides will spend 200 billion won (US$175 million) to build the plant, with SK Global chemical holding 60 percent of the capital base.
With the latest deal, SK Global chemical will have its third EAA plant, followed by its existing facilities in the United States and Spain.
SK Global chemical said the collaboration with Satellite Petrochemical will help the company explore the Asian market in addition to North America and Europe.
The company added that demand for EAA-based materials is rising as the packaging market for fresh food products is growing with increased delivery services amid the pandemic.