LG Chem Vice Chairman Shin Hak-cheol, Chungcheongnam-do Gov. Yang Seung-jo and Seosan Mayor Maeng Jung-ho pose after they struck an MOU on LG Chem’s investments into the Daesan Industrial Complex at the provincial government on Aug. 19. (Photo: Chungcheongnam-do provincial govt.)

LG Chem plans to pour in 2.6 trillion won to build 10 plants in Korea, with the goal of nurturing biodegradable plastic and other eco-friendly materials in the petrochemical sector.

The move may be construed as LG Chem’s bid to accelerate a shift into value-added, eco-friendly material business portfolio for sustainable growth based on ESG.

In particular, LG Chem plans to transform the Daesan Industrial Complex in which conventional business plants have already set up, into a Korean ESG business center.

LG Chem announced a plan on Aug. 19 to build 10 plants, including ones capable of producing biodegradable high-polymer plastic poly (butylene-adipate-co-terephthalate) (PBAT) and photovoltaic polyolefin elastomers (POE) on a gradual basis by investing 2.6 trillion won by 2028.

On the same day, LG Chem struck an MOU on investments with Chungcheongnam-do and Seosan City to facilitate the smooth implementation of the project.

The deal calls for securing new sites covering 1.22 million sq. meters on top of the existing site of the Daesan Industrial Complex, to be used for the establishment of new plants and investments for eco-friendly materials and processes.

Initially, LG Chem plans to launch projects to build PBAT and POE plants this year, with the goal of putting them into commercial operation by 2024.

The company plans to invest 480 billion to build plants with a capacity of 50,000 tons and 100,000 tons, respectively.

The biodegradable PBAT is used for producing disposable films, while demand for POE, being used for producing photovoltaic panel film as a value-added synthetic resident, is on the rise.

Business sources said that PBAT and POE are forecast to maintain an average growth rate of about 30 percent by 2025.

LG Chem now possesses a POE plant with an annual capacity of 280,000 tons at the Daesan Industrial Complex. If the upcoming expansion is completed, LG Chem’s POE production capacity will jump to a combined 280,000 tons.

It will make LG Chem rank second in the world and see its sales surge more than 470 billion won in annual sales compared to current levels.

Other plants will involve items ranging from basic bio raw materials to eco-friendly materials, recycled waste plastic and greenhouse gas reductions.

 
LG Chem Vice Chairman Shin Hak-cheol said, “The investment agreement will be part of sustainable growth strategies and a signal to step on the gas to accelerate the eco-friendly material business.”

A view of LG Chem’s plant in Daesan, Chungcheongnam-do. (Photo: LG Chem)