LG Chem, Korea’s leading producer of chemicals, said yesterday it has signed a deal with the state-run China National Offshore Oil Corp. on the establishment of a joint venture to build a plant for acrylonitrile butadiene styrene, or ABS, in China.
The joint venture, to be named CNOOC & LG Petrochemicals Co., will build the plant with an annual capacity of 300,000 tons of ABS, a raw material used primarily in auto parts and electronics. Construction of the plant in Huizhou in China’s Guangdong Province is scheduled for completion in 2013, LG Chem said.
The plant will cost $370 million to complete, with LG Chem investing $61 million and the remainder to be financed through the joint venture, the Korean company said. LG Chem and CNOOC will each have a 50 percent stake in the joint venture.
The first phase of plant construction is set for completion in the second half of 2011, when the plant will start producing 150,000 tons of ABS annually. The first phase will be followed by an expansion of the plant to increase its annual production capacity to 300,000 tons by 2013, LG Chem said.
The joint venture aims to post $300 million in sales in China in 2012 and $600 million in 2014, the company said.
LG Chem also said that it will increase the annual ABS production capacity of Ningbo LG Yongxing Chemical Co., its joint venture with China’s Yongxing Chemical Co., to 700,000 tons by 2012 from the current 580,000 tons. That enterprise was set up in Ningbo, Zhejiang Province in 1996.
After the construction and expansion of the Chinese ABS plants is completed, LG Chem will have an annual production capacity of 1.6 million tons of ABS in all, the company said.
Source from: JoongAng Daily