SKC Investments in China
SKC to invest $71 mn to add wet chemical, polyurethane plants in China
South Korea’s SKC Co., a chemical and tech material producing unit of SK Group, will invest total 80 billion won ($71 million) to add facilities at its industrial site in China to produce wet and polyurethane chemicals needed for cleanroom component manufacturing and motor vehicles.
With the addition of the new facilities in Nantong, Jiangsu, China, the company aims to raise the operating profit of its Nantong manufacturing complex to 30 billion won by 2021 on revenue of 130 billion won.
According to the company on Thursday, SKC’s board on Wednesday approved a plan to set up a joint venture, tentatively named Hong Kong SPC, with an unnamed Korean wet chemical producer to build a wet chemicals plant in China. SKC will inject total $40 million in the wet chemical factory project including 16.9 billion won, or 1.11 percent of its total equity capital, to hold a 75.1 percent stake in Hong Kong SPC.
Wet chemicals are used for liquid crystal display (LCD) panel and semiconductor manufacturing processes like cleaning and etching. The global wet chemical market was estimated at 1.3 trillion won in 2016, according to market analysts.
Hong Kong SPC will later set up a separate unit that manufactures wet chemical products in China. The company will embark on the construction of the wet chemical plant this year with an aim to start commercial production in 2019. It expects demand for its wet chemical products would continue to rise in China because about 50 percent of all China-made semiconductors are produced in Jiangsu where the plant will be built and around Shanghai, SKC said.
The chemical unit of SK will also invest 35 billion won separately to build a factory for polyurethane products used in building a car. The global market of polyurethane products for vehicles was estimated at 1.1 trillion won in 2015. The company aims to break ground for the factory in January next year and kick off its operation in February 2019.
The new complex in Nantong would serve as one of SKC’s core production bases along with Ulsan, Suwon and Jincheon plants, the company said. The Nantong development zone is the only chemical industrial complex with ideal conditions near Shanghai.
SKC shares closed Thursday down 1.69 percent at 40,800 won.
By Lee Jae-cheol and Lee Ha-yeon