SEOUL, Jul. 15 (Korea Bizwire) — Lotte Chemical Corp., a major chemical unit under Lotte Group, said Monday it will establish a petrochemical joint venture with GS Energy Co., an energy-specialized holding company of GS Group.
Lotte Chemical and GS Energy signed an agreement to form a joint venture, tentatively named Lotte-GS Chemical Company, this year to produce chemical compounds like bisphenol A (BPA) and C4 fraction.
Lotte Chemical will have a 51 percent stake in the joint venture, with the rest to be owned by GS Energy.
The two companies will invest a total of 800 billion won (US$677 million) by 2023 to build a plant in Yeosu, 450 kilometers south of Seoul, that can produce 200,000 tons of BPA and 210,000 tons of C4 fraction products a year.
Lotte Chemical said the joint venture is expected to post 1 trillion won in sales and 100 billion won in operating profit, while creating 7,700 jobs.
BPA is a key material for polycarbonate plastics used in electronic and medical products. C4 fraction is a chemical compound used for making butadiene (BD) and tert-butyl alcohol (TBA).
Lotte Chemical said it will receive BPA products from the joint company to enhance the price competitiveness of its polycarbonates, while expanding its C4 fraction business.
GS Energy said its refining unit, GS Caltex Corp., will supply materials like propylene and benzene for the joint venture.