LG Chem Invests 2.6 Trillion KRW in Eco-Friendly Materials Including 'Biodegradable Plastics'

Shin Hak-cheol, Vice Chairman of LG Chem, "Will Innovate Business Portfolio Based on ESG"
Follow-up Plan to Invest 10 Trillion KRW in Three New Growth Engines by 2025
Daesan Plant to Be Developed as an ESG Business Hub

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] LG Chem is investing 2.6 trillion KRW in its Daesan Plant in Chungnam to build facilities for eco-friendly materials such as biodegradable plastics. This investment is a follow-up measure to the strategy announced by LG Chem Vice Chairman Shin Hak-cheol last month to invest 10 trillion KRW to foster three new growth engines. Through this, LG Chem plans to develop the Daesan site into a hub for ESG (Environmental, Social, and Governance)-based businesses by 2028, covering bio-based raw material production, eco-friendly materials, plastic recycling, and greenhouse gas reduction.

On the 19th, LG Chem announced that it will invest a total of 2.6 trillion KRW by 2028 to establish 10 new factories at the Daesan Plant in Chungnam, including biodegradable resin (PBAT) and polyolefin elastomer (POE), a high-value-added synthetic resin used for solar films.

The PBAT plant is planned to have an annual production capacity of 50,000 tons, and the POE plant will have an annual capacity of 100,000 tons. Both plants will begin construction within this year, aiming for commercial production in 2024. The resulting increase in sales is expected to exceed 470 billion KRW annually.

Currently, LG Chem operates a POE plant with an annual capacity of 280,000 tons, and with the additional 100,000 tons from this expansion, the total POE production capacity will increase to 380,000 tons. This is expected to rank as the world's second-largest capacity. This is LG Chem’s first investment in PBAT.

PBAT is a biodegradable resin that decomposes quickly in nature and is expected to significantly help solve environmental issues such as plastic waste. POE has high insulation and moisture barrier properties and excellent power generation efficiency, leading to rapidly increasing demand for films that protect solar panels and minimize power loss.

Previously, LG Chem identified three new growth engines: △ battery materials △ eco-friendly materials △ global new drugs. For eco-friendly materials, LG Chem has announced plans to introduce external technology for PBAT investment and establish joint ventures (JVs) to secure eco-friendly fuels. With recent tightening of environmental regulations, global chemical companies are fiercely competing to develop and produce chemically recycled products. LG Chem aims to discover promising core technologies in chemical recycling to secure market leadership.

According to industry sources, PBAT and POE are expected to maintain high growth rates of around 30% annually until 2025, driven by increasing demand for biodegradable plastics following ESG trends and the expansion of renewable energy supply.

Meanwhile, LG Chem has signed an investment agreement (MOU) with Chungnam Province and Seosan City to ensure smooth progress of the planned investments. Through this agreement, LG Chem has secured approximately 790,000 square meters (240,000 pyeong) of new land in addition to the existing Daesan Plant site and plans to actively utilize it for establishing new factories and investing in related eco-friendly materials and processes.

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