Chairman Shin Dong-bin of Lotte Group, right, inspects a joint venture chemical rubber plant by Lotte Chemical and Mitsubishi Trading  and Woobe Group both of Japan with an investment of $130 million in Malaysia following a dedication ceremony of the new plant on Aug. 24 as Lotte Chemical President Huh Soo-young looks on. (Photo:Lotte Group)

Lotte Chemical ended its second quarter operation with a whopping increase in sales and operating profit from the preceding quarter. Its preliminary sales figures reached 3.178 trillion won, up 13.5 percent  and operateing profit at 639.8 billion won, up 13.5 percent and  up a whopping 259.4 percent from the preceding quarter respectively, the company said on July 30.

But compared to the same period last year, the second quarter sales fell 16 percent, but operating profit and net profit jumped 658.5 percent and 790.3 percent respectively YoY, the company said.

The favorable results were owed to stable olefin prices, while the prices of ethylene stayed strong througout the quarter with prices of the related products recovering, help expanding operating proift a great deal, the company said. The sales of the ethlene sector products rose to 1.977 trillion won duirng the quarter with operating profit rising to 501.8 billion won, up 13.7 percent and 149.2 percent respectively from the previous quarter.

In the meantime, Axiall Corporation (NYSE: AXLL) and Lotte Chemical Corporation (KOSPI: 011170)  of Korea announced on June 17 that they finalized a joint-venture arrangement to construct an ethane cracker facility. The final investment decision remains subject to approval by both companies’ boards of directors. The companies have tasked LACC LLC to design, build and operate the ethane cracker plant in Louisiana that would produce approximately one million metric tons of ethylene annually once it commenced operation. 

“This investment will build on Lotte Chemical’s global ethylene construction and operating capabilities and increase our manufacturing presence in the North American market,” they said. 

Since announcing their intent to partner on the project in February 2014, Axiall and Lotte have also completed a joint FEED study for the plant. The two are now evaluating final project details, including site selection, which is anticipated to be in Lake Charles, La. A final investment decision is anticipated in the second half of 2015. If approved, the plant’s anticipated start-up would be the end of 2018. 

If approved by Lotte’s Board of Directors, Lotte Chemical also plans to build a monoethylene glycol (MEG) plant adjacent to the proposed cracker facility. Axiall would not have any investment in or ownership of that MEG plant. Lotte Chemical currently operates three crackers in Asia that produce more than 2.8 million metric tons of ethylene capacity annually. 

Financial terms of the joint venture call for Lotte to lead the project with Axiall having a maximum capital contribution obligation of $225 million towards the cracker during the engineering, procurement and construction phases of the project. The amount of Axiall’s capital contribution relative to the total, actual cost of constructing the cracker would determine the amount of ownership Axiall holds in the cracker. Axiall will retain an option to increase its ownership level to up to 50 percent of the completed plant.

Axiall Corporation is a leading integrated chemicals and building products company. Headquartered in Atlanta, Axiall has manufacturing facilities located throughout North America and in Asia to provide industry-leading materials and services to customers. For more information, visit www.axiall.com. 

Lotte Chemical’s Yeosu, Daesan and Ulsan plants boast the largest scale of domestic and international operations. The company has accomplished vertical systematization with respect to raw materials and products through steady plant and business expansion as well as production of basic petrochemical raw materials and products such as olefin and aromatics. Among the high-quality products produced by Lotte Chemical through its efficient processes are ethylene, HDPE, LDPE, LLDPE, PP, functional resin, EG, SM, PIA, PET, etc. Moreover, the Lotte Chemical Research Institute in Daejeon is establishing a solid foothold in the domestic petrochemical field through the steady development of new products. Lotte Chemical’s products are being distributed to 152 countries around the world. With the acquisition of Pakistan’s PTA in 2009, Artenius in the U.K. in 2010 and Titan Chemical Corp., Lotte Chemical is now able to efficiently supply excellent products to an increasing number of countries.

The company is further accelerating its efforts to strengthen its global competitiveness by establishing overseas branches in Hong Kong, Russia and the U.S., along with the sales corporation in China for active sales activities both in domestic and abroad. As Asia’s top chemical company, Lotte Chemical will become a global chemical company that genuinely cares for the improvement in the quality of humanity and a balance with the environment.