Lotte Chem finishes U.S. cracker project
For Lotte Group, the country’s fifth largest conglomerate, the complex is a pivotal part of Chairman Shin Dong-bin’s grand plan to develop the chemical business as one of the group’s two main pillars along with retail and food, Lotte’s main business for decades.
“I thank Lotte Chemical staff, partners and the two governments that made this project possible,” Chairman Shin said during a celebratory event held in Lake Charles, Louisiana on Thursday. “We promise to fulfill our role to lead Korea’s chemical industry with pride as the first local company to establish a world-class petrochemical plant in the United States.”
In a congratulatory message delivered by a White House official, U.S. President Donald Trump lauded the $3.1 billion complex as the single largest investment made by a Korean company in the United States during his administration and proof that the Korea-U.S. alliance remains strong.
The event was attended by Prime Minister Lee Nak-yon, Lotte’s Chairman Shin and U.S. government officials.
According to Lotte, the U.S. plant will increase the company’s ethylene production capacity to 4.5 million tons a year, making it the seventh-largest ethylene producer in the world. As of last year, it was outside the 20th rank. Ethylene is a widely used chemical substance that can produce various types of plastic including polyethylene.
Measuring 1 million square meters (247 acres), the complex consists of an ethane cracker that can produce 1 million tons of ethylene from shale gas per year, and an ethylene glycol factory with a capacity of 700,000 tons a year. Ethylene glycol is used for synthetic fibers and plastic bottles.
The ethane cracker is partly owned by Texas-based Westlake Chemical, which has a 12 percent share. The rest of the cracker and the ethylene glycol plant belong to Lotte.
“The annual capacity of the ethane cracker at the moment is 1 million tons a year, but the site was made to increase this capacity one day to a maximum of 1.4 million tons a year,” said Lotte Chemical President Kim Gyo-hyun to Korean reporters ahead of the celebratory event Thursday.
“Our goal is to boost our annual revenue to 50 trillion won [$42.4 billion] in the next 10 years,” he added. Lotte Chemical’s annual revenue last year was 16.5 trillion won.
The completion of the massive project is a significant event for the conglomerate. Lotte has gone through a difficult time following a high-profile succession battle pitting Chairman Shin against his older brother in 2015 and Shin Dong-bin’s 10-month jailing for bribery last year.
He was heavily involved in many of Lotte’s investment plans and his absence hindered a lot of decision makings.
The chemical sector, in particular, is a business he is passionate about.
BY SONG KYOUNG-SON [email@example.com]