SK General Chemicals to Establish Eco-Friendly High-Value Packaging Material Production Base in China

[Asia Economy Reporter Hwang Yoon-joo] SK Innovation's subsidiary SK Geo Centric has embarked on expanding its eco-friendly high-value-added packaging materials business to actively implement its financial story focused on eco-friendly ESG (environment, social, governance) principles.

On the 11th, SK Geo Centric announced that it signed a memorandum of understanding to establish a joint venture in China with Chinese chemical company Weixing Petrochemical for the production and sales of ethylene acrylic acid (EAA), a type of functional adhesive resin (Adhesive Copolymer).

The new joint venture will be established within this year with a total investment of approximately 200 billion KRW, with SK Geo Centric and Weixing Petrochemical contributing capital in a 60:40 ratio. By combining SK Geo Centric's EAA material production technology and sales channels with Weixing Petrochemical's stable raw material supply, the strategy is to secure a leading position in the Asian market, including China.

Since acquiring the EAA business from Dow in the United States in 2017, SK Geo Centric has announced plans to expand its high-value-added packaging business targeting emerging Asian countries such as China. Through this joint venture, SK Geo Centric will secure its third EAA plant in Lianyungang, Jiangsu Province, China, following facilities in Texas, USA, and Tarragona, Spain, establishing a global high-value-added material production base connecting "America-Europe-Asia."

SK Geo Centric stated, "We considered strategic investment due to the significant increase in demand for EAA materials in emerging Asian markets such as China." The fresh food packaging market in China is rapidly growing due to the surge in packaging and delivery demand. SK Geo Centric's EAA materials are well known as eco-friendly packaging technology and are gaining attention in the rapidly growing fresh food packaging materials market.

Lianyungang, the site of the new EAA plant in China, is currently developing a large-scale eco-friendly chemical industrial complex and is expected to grow into the No.1 chemical industrial complex in China. Additionally, Lianyungang was ultimately selected due to its advantageous location with well-established export-import infrastructure, utilities such as electricity and wastewater treatment, and the ability to stably supply key raw materials like ethylene for EAA production within the complex.

Through establishing its first EAA plant in China, SK Geo Centric plans not only to use it as a foothold to dominate the eco-friendly high-value-added packaging market in Asia but also to develop it into a hub for eco-friendly chemical materials.

SK Geo Centric President Na Kyung-soo emphasized, "To implement More Green, Less Carbon, the core of our financial story, we are accelerating the expansion of the eco-friendly high-value-added packaging business and the establishment of a plastic circular economy." He added, "We will lead not only in securing the global high-value-added packaging market but also in building an eco-friendly chemical materials ecosystem that considers everything from production to recycling of products."

This content was produced with the assistance of AI translation services.