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SK Global Chemical revealed that it would be building a packaging material factory in China. The project was revealed by the company on Sunday, March 14.
As per Yonhap News Agency, SK Global Chemical, which is an affiliate of SK Innovations, will be teaming up with Satellite Petrochemical, a USA corporation that is a subsidiary of Zhejiang Satellite Petrochemical Co. Ltd, to construct the plant that will produce ethylene acrylic acid (EAA).
What SK Global is producing in the China plant
As mentioned, SK Global Chemical will be making EAA’s in the plant that will soon rise in China. This is a high-end eco-friendly material that is mostly used for packaging.
The factory will be built in Lianyungang in the province of Jiangsu Province. Once fully erected and operational, the South Korean company is expecting to produce at least 40,000 tons of EAA per year.
For this joint venture, it was disclosed that SK Global and Satellite Petrochemical would shell out $175 million or KRW200 billion for the construction of the plant. With the amount, the former will shoulder 60 percent of the capital base.
This will be the company’s third EAA factory overseas. SK has facilities and already operates similar plants in Spain and the United States. In any case, with this latest collaboration, the firm believes it will greatly help them in further exploring the Asian market in addition to Europe and North America.
Why in China?
SK stated that there is an increasing demand for EAA-based materials, and China is one of the countries with such high demand. This is because the delivery business in the country is growing fast as well due to the pandemic. Also, the company made the decision to build the plant here as part of its move to amalgamate environment, social, and governance (ESG) values into management strategies.
"The site was selected for its advantageous location near export and import infrastructure and utilities such as a power grid and waste-water disposal facilities, as well as a stable source of ethylene, one of the key ingredients," The Korea Times quoted the company’s spokesperson as saying.
SK Global’s CEO Na Kyung Soo added, "As part of our 'More Green, Less Carbon' goal, we are accelerating the expansion of our eco-friendly, high value-added packaging business, and the recycling of plastics."
