Polyoxymethylene Mitsubishi Gas Chemical, Celanese to Restructure Korea Engineering Plastics
Korea Engineering Plastics is a joint venture firm of Mitsubishi Gas Chemical Company, Celanese and Mitsubishi Corporation. Under a MOU signed between the partners, the JV firm will now aim to focus on manufacturing and supplying high quality polyoxymethylene products to its shareholders who will then market it globally.
Tokyo/Japan – Celanese Corporation and Mitsubishi Gas Chemical Company have recently announced the signing of a memorandum of understanding (MOU) confirming their intent to restructure Korea Engineering Plastics (KEP), a joint venture owned 50 % by Celanese, 40 % by MGC and 10 % by Mitsubishi Corporation.
Under the terms of the MOU, KEP would focus on manufacturing, developing, producing, and supplying high quality products to its shareholders, who would then independently market them globally and without restrictions. The MOU envisions a modernisation of the scope of the KEP joint venture, which was formed in 1987 to manufacture and market polyoxymethylene (POM) in Asia, with a particular focus on serving domestic demand in Korea.
Celanese and MGC believe that focusing KEP’s efforts on manufacturing and supplying its shareholders with a leading portfolio of innovative products is a necessary response to the globalisation of the POM industry, the fragmentation of the marketing supply chain, and other changes in market conditions since KEP was first formed.
POM is one of the world’s most widely used engineered materials, known for its high dimensional stability, hardness and creep resistance. These unique qualities allow POM to be used as a broad replacement for metal parts. Along with its copolymer resins, POM is widely used as an engineering plastic across almost every industry.
The parties have also committed to increasing KEP’s production capacity to improve the long-term security of supply to its customers and further support their growth. The increased volumes are expected to come on-stream in a series of steps in the coming years.
The parties expect the joint venture restructuring to be completed before the end of 2021, subject to customary closing conditions and any necessary regulatory approvals. KEP will continue to serve its customers, without change, until the restructuring is closed and will provide more information pertaining to the transition as details are finalised.
The partners of KEP are focused on ensuring KEP’s customers will continue to be able to depend on a reliable supply of products and KEP will work closely with them on a plan to address any concerns in the coming months.