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LG Chemical Takes Over Hyundai Petrochemical
2000.11.23 프린트 하기
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Seoul Korea - LG Chemical, Ltd., the largest chemical company in Korea, announced today that it signed a contract on acquiring the 200 thousand mt/yr PVC (Poly Vinyl Chloride) operation with Hyundai Petrochemical.

The price for the purchase has been bargained at 105 billion won on the undertakings that LG will guarantee full employment. LG Chemical is to pay it in cash when final procedures to the acquisition are completed. The transaction will allow both sides to strengthen their strategic core businesses nationally and internationally.

This acquisition raises LG's current PVC production volume from 700 thousand mt. (Korea : 550 thousand mt. / China : 150 thousand mt.) to 900 thousand mt. annually, raising LG Chemical's position as the 7th largest PVC maker in the world and the 2nd largest in Asia.

The take-over is considered a 'voluntary integration' move. To the Korean PVC makers it would mean seizing a chance of gaining global market competitiveness through inhibiting further individual expansions into the already excessive domestic PVC market. From LG Chemicals point of view, the acquisition would mean grabbing the opportunity to perform 'economies of scale' in their PVC business.

Although domestic supply of PVC has far surpassed its market saturation point, exports of this item accounts for 40% of total domestic production. The world market, where PVC is considered to be the most ubiquitously used synthetic resin and still facing more demands, will accommodate additional supply.

While the world’s topnotch PVC makers produce an average of 1.4 million mt. annually, the three domestic manufacturers turn out only an average of 39 thousand mt. per year. Comparatively, each domestic maker lacks global competitiveness in terms of both scale and efficiency.

The acquisition will allow LG Chemical to reinforce its core PVC business, and secure a vantage ground on entering the Chinese and the Asian market.

With years of business experience on technology and marketing, LG Chemical is confident that it can enhance the newly attached operation substantial production growth, which will work as a synergy to its existing PVC business.

LG Chemical foresees its position in 2002 as the world’s top-ranking PVC manufacturer with an annual production capacity of 1 million mt. under the assumption that further expansion in China goes well as planned.

* LG Chemical Ltd. is the largest chemical company in Korea, which manufactures petrochemicals, industrial materials, automotive parts, household goods, electronic materials and pharmaceuticals with annual sales of KRWon 4,546 billion. It tentatively plans to demerge into three separate companies (LG Chem Investment, Ltd., LG Chem, Ltd. and LG Household & Health Care Ltd.) in April 1, 2001.


References

PVC (Polyvinyl Chloride)

It is a synthetic resin belonging to the family of polymeric organic compounds. After mixing with plasticizers stabilizers, and pigments, the resin may be fabricated by techniques such as calendering, molding, or extrusion into flexible articles such as raincoats, shower curtains, packaging films, car seats, shoes, toys and agricultural film. Without plasticizers, it can be used in making rigid products such as water pipe, plumbing fittings, and phonograph records.

PVC/VCM Production Capacity Nationwide

(Unit: thousand mt/yr)..........

.

LG Chemical

Hyundai Petrochemical

LG +
Hyundai

Hanwha Petrochemical

Total

PVC

 550*

200

750

415

1,165

VCM

600

200

800

516

1,316

* Additionally, LG Chemical produces 150 thousand mt/yr of PVC in China


Top Ten PVC Makers Worldwide

(Unit: thousand mt/yr)..........

Rank

Company

Capacity

Nationality

Remarks

1st

 Shin-etsu

2,750

Japan, USA

 Shin-etsu + Rovin

2nd

 FPC

2,630

Taiwan, USA

 Taiwan's FPC 1.4 mil mt.

3rd

 Oxy Vinyls

2,100

USA

 Oxychem + Geon

4th

 EVC

1,800

EU

 .

5th

 Solvin

1,230

EU

 Solvay + BASF

6th

 Georgio

1,170

USA

 .

7th

 LG Chem

  900

Korea

 LG + Hyundai

8th

 Atochem

  753

France

 .

9th

 Taiyo Vinyl

  585

Japan

 .

10th

 Vinnolit

  570

Germany

 .

 

 

----------------------------------------
For further information, please contact:

LG Chemical Ltd.,
Public Relations Team (Seoul Korea)

Theodore Kim
Tel  : 82-2-3773-3411
Fax  : 82-2-3773-7933
Email: theodore@lgchem.com

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