SK Geo Centric plans to expand its business through a new production base in China, after securing its plants in the U.S. and Europe, to produce Ethylene Acrylic Acid (EAA), a high value-added chemical material.
SK Geo Centric has signed the contract to establish a joint venture (JV) for EAA production with Weixing Chemical in China, and also signed an investment agreement with the Lianyungang Petrochemical Complex in Xuwei. SK Geo Centric and Weixing Chemical established a joint venture in a share ratio of 6:4, and will build an EAA manufacturing plant by investing approximately KRW 290 billion (around $223 million) on a site of roughly 66,000 m2 in the petrochemical complex located in Lianyungang, Jiangsu Province, in China. The plant is scheduled to be completed in the first half of 2025 to start commercial production with an annual capacity of 40,000 tons. The EAAJV will combine SK’s processing technology, factory operation know-hows, and raw materials from Weixing Chemical.
The signing ceremony of the joint venture contract and investment agreement was held at the Daluqiao International Conference Center Hotel in Lianyungang, China. Among the attendees were Na Kyung-soo, CEO of SK Geo Centric (attended via video conferencing), Ma Shi Guang, the Party Secretary of Lianyungang City, and Yang Wei Dong, President of Weixing Chemical.
Due to its high technological entry barriers, more than 80% of the global supply of EAA is performed by three or four major global chemical companies, including SK Geo Centric. EAA is a type of high-functional bonding resin that bonds different substances such as metal and plastic, paper and plastic with a powerful adhesive performance.
Thanks to its superior durability, transparency, and bonding properties, EAA is becoming increasingly utilized in various industries, from sterilization packs and meat vacuum packaging to golf balls and tempered glass. It is used in electric vehicle battery electrodes and membranes because of expected stability improvement, and EAA is also used in vacuum packing of meat for longer storage thereby EAA’s demand is on the rise. In particular, it is attracting attention as an eco-friendly material that reduces the amount of plastic used and increases the recycling rate due to its excellent bonding performance and ease of separation, and is also expected to create demand for more diverse uses in the future.
In 2017, SK Geo Centric acquired the EAA business from Dow Chemical in the U.S. and secured production bases in Texas, USA and Tarragona, Spain. In particular, the Spanish plant independently developed and successfully produced “ionomer,” a chemical material that combines EAA with metal ions such as sodium, for the first time in Korea, and is also expanding new businesses.
Through the establishment of a joint venture with Weixing Chemical of China, SK Geo Centric has secured production facilities in Asia following the US and Europe, and plans to use them in various ways in the future, responding flexibly to global market demand. Starting with this first manufacturing plant in China, the company will meet the growing regional demand with additional expansion plans in the region according to the growth of related businesses.
“We will preempt the demand in China and Asia through the only EAA manufacturing plant in China,” said Na Kyung-soo, CEO of SK Geo Centric. “We will actively utilize SK Geo Centric’s technological prowess and marketing capabilities in Asia to strengthen our portfolio of high value-added chemical products and to be reborn as a global leader in the field of eco-friendly chemical materials,” he added.