Hanwha Chemical sees EVA as savior

Hanwha Chemical has expanded its production of ethylene-vinyl acetate (EVA), a high value-added material used for making solar cells, as part of its strategy to weather the storm in the global petrochemical industry.

The company said yesterday it completed construction of an additional 40,000-ton EVA plant in Ulsan, North Gyeongsang. The facility will take the company’s total EVA production capacity to 160,000 tons a year. Hanwha expects the expansion will raise its annual sales to 100 billion won.

This comes as part of the company’s strategy to tackle difficulties in the ongoing slump in the global petrochemical industry, where demand for products has been waning for several years. Compounding the problem for manufacturers, ethylene prices have shot up, causing production costs to surge. Cheaper products from the Middle East have expanded their market shares, adding to the woes of traditionally strong market players.

EVA is a core material for coating sheets, solar cells and hot melts. Due to its relatively high value, it is seen as an attractive revenue supplier by companies like Hanwha Chemical compared to other petrochemical products.

Because it requires sophisticated technology, EVA is produced by a limited number of companies, including Hanwha, U.S. DuPont and Japan’s Tosoh Chemical.

“We built the plant based wholly on our own technology, so we’ll be able to cut investment and operating costs, and secure a more competitive edge in terms of our lower production costs,” a Hanwha employee said.

As the photovoltaic market grows, demand for high-quality EVA will rise, enabling Hanwha to expect synergy effects with its petrochemical and solar businesses, it said.

Hanwha Group is continuing to make large investments the photovoltaic business as one of its key growth engines.

By Song Su-hyun [ssh@joongang.co.kr]