SEOUL, March 24 (Korea Bizwire) — South Korean chemical firm SK Geocentric Co. said Friday it is spending an additional 400 billion won (US$310 million) to build a second factory for advanced packaging materials in China.
SK Geocentric signed the initial agreement earlier this week with Weixing Chemical on expanding the ethylene acrylic acid (EAA) factory in the eastern Chinese city of Lianyungang, where Weixing has its petrochemical complex.
EAA is a type of adhesive copolymer heavily used in flexible packaging, including meat and cheese packaging and protective metal coating, such as wire and cable.
The two companies formed a 6:4 joint venture in August last year and are currently building an EAA factory on the same site, with the construction set to be completed in 2025.
They are investing 290 billion won for the first EAA factory in China, capable of producing 40,000 tons a year. It will go into operation in 2025.
The second factory in China will aim to produce 50,000 tons of EAA a year when it starts operations in 2028.
When completed, it will boost SK Geocentric’s global EAA production capacity overall to 140,000 tons annually.
SK Geocentric said the additional investment will help strengthen its foothold in Asia in the high value-added EAA market.
SK Geocentric, formerly SK Global Chemical, acquired the EAA business from Dow Chemical Company in 2017. It operates two other EAA plants in the United States and Spain.