SEOUL -- Taekwang Industrial, the manufacture of petrochemical products in South Korea, will set up an acrylonitrile joint venture plant with LG Chem to cope with growing demand in the global market. Commercial production of the plant with an annual production capacity of 260,000 tons is to begin in 2024.
Acrylonitrile is an important monomer for the manufacture of useful plastics and important copolymers, such as acrylonitrile butadiene styrene (ABS) or synthetic rubbers. ABS is useful in manufacturing household and consumer goods as well as medical and industrial products. Taekwang Industrial controls one-third of South Korea's acrylonitrile market.
Taekwang Industrial said its board has endorsed the establishment of a joint venture with LG Chem, a chemical wing of LG Group. The joint venture tentatively named TL Chemical will be based in the southeastern industrial city of Ulsan. Taekwang Industrial controls 60 percent of the joint venture and the remainder will be owned by LG Chem. The two companies will make additional investments through a paid-in capital increase.
"Through this joint venture, we can share risks from large-scale investments, enhance the competitiveness of core businesses, and expand market dominance," an unnamed Taekwang official said in a statement on June 2, adding Taekwon can secure stable demand sources.
LG Chem will able to secure a key raw material needed for the production of ABS and nitrile butadiene latex (NBL), which shows excellent resistance to oil and chemicals, making it useful in manufacturing protective equipment such as gloves for industrial and use. A COVID-19 pandemic boosted demands for nitrile gloves. LG Chem aims to produce more than one million tons of NBL in 2025. The company has established an NBL joint venture in Malaysia.
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