Lotte Chem finishes plant for chemicals in Uzbekistan
“It took more time than we expected, but it was finally able to bear fruit with the government’s support and as Lotte Group Chairman Shin Dong-bin resolved many problems, including traffic infrastructure, when he met Uzbekistan government officials two years ago,” said Huh Soo-young, CEO and representative director of Lotte Chemical, in a press briefing held at the Hotel Lotte in central Seoul on Thursday.
“By successfully running businesses in Uzbekistan,” he continued, “we will try to become a leading petrochemical company in the world.”
The Surgil project was launched in 2006 by a Korean consortium comprising Lotte Chemical, Korea Gas Corporation and GS E&R. The consortium established a joint venture, the UZ-Kor Gas Chemical LLC, with an Uzbekistan state-run company Uzbekneftegaz. The consortium financed 50 percent of the project, and the Uzbekistan company financed the rest to develop a gas chemical complex to produce products such as high-density polyethylene (HDPE) and polypropylene (PP) in facilities on about 245 acres of land.
The company said the plant is currently undergoing a trial run and will start commercial production in January. It said the HDPE and PP plants were built with its in-house technologies and are Korea’s first petrochemical technology exports to the global market.
The facilities are the biggest basic industrial plant built in Uzbekistan.
As part of its effort to improve global competitiveness and profitability, the company said it will try to secure more raw materials at low prices and expand into higher value-added businesses in the future.
“We are trying to make progress in other businesses like chemical flow batteries, which are different from the lithium-ion batteries being produced by other Korean companies like LG Chem,” said CEO Huh. “Once the battery fuses with lithium-ion batteries, the overall efficiency of a product will be improved, though it will take two to three more years to be commercialized.”
Now that the Surgil project has been completed, the company will speed up an ethane cracker project being jointly operated with Axiall, an American company. The company aims to begin its commercial production in 2018.
There are concerns that chemical businesses like Lotte are facing troubles due to oversupply from China, which had rapidly increased the number of chemical plants in its country in the past few years.
“In 2012, China expanded its petrochemical plant by 12 million tons in terms of production when the total production for Korea was only 6.5 million tons,” Huh said.
“Under such circumstances, companies like us need to keep focusing on strengthening our competitiveness.”
BY KWON SANG-SOO [firstname.lastname@example.org]