Kolon, BASF start making POMA joint venture between Kolon Plastics and Germany’s BASF started operations at its new polyoxymethylene plant in Gimcheon, North Gyeongsang, on Thursday.
Polyoxymethylene, or POM, is a type of engineering plastic that has a high resistance to heat, allowing it to be used as a substitute for metal components in machinery. It is also highly resilient against friction and chemicals - making it ideal for vehicle components.
Kolon Plastics has an existing POM factory in Gimcheon which has a production capacity of 80,000 metric tons per year. Kolon BASF innoPOM’s new factory expands this figure to 150,000 metric tons per year, making it the largest POM production facility in the world. For Kolon Plastics, the joint plant is expected to generate 80 billion won per year starting from 2019.
“Thanks to the synergy of the two partners, we produced an outcome that would have been difficult to succeed if done by just one of us,” said Kolon CEO You Seog-jin at a press conference held Thursday at the Kolon One&Only Tower in western Seoul.
“The production of 150,000 metric tons per year and the economy of scale that follows will ensure a stable material supply at an attractive price.”
The companies said in a statement that the new plant combines BASF’s quality control system and energy-saving technology with Kolon’s know-how to build simpler and more cost-efficient production facilities. POM requires advanced technology and is usually made by companies from developed countries, they added.
Kolon and BASF each have a 50 percent stake in the joint venture. Although they will share facilities inside the new POM factory, the two partners will conduct sales activities separately so they can meet specific demand and standards that differ according to their respective clients.
This is BASF’s first POM facility in Asia, which, by continent, accounted for 66 percent of the global POM demand in 2018.
Demand for the material surged roughly 60 percent in the last decade to 1.4 million tons this year, according to IHS Markit. The estimate for the next five years is that demand will continue to grow 13 percent to 1.6 million tons per year.
A sector that both companies are expecting to see a rise in demand in is car components, which make up 42 percent of the world’s POM demand. Lighter vehicles consume less fuel, and POM makes for much lighter components than metal. Kolon and BASF are both eyeing China, where there’s a surge of vehicle manufacturers establishing factories.
“There might be a lot of plants [in China], but there are a lot of them that are not competitive,” said Raimar Jahn, BASF’s president in charge of the performance materials division. “[When it comes to POM,] it’s not just the material, but the combination of materials to make it work well.”
BY SONG KYOUNG-SON [firstname.lastname@example.org]
More in Industry
Shutting up shop
Spending billions in U.S. may be good move for Samsung