China: Packaging Materials SK Global Chemical to Establish Ethylene Acrylic Acid Production Base in China
Under a MOU signed between SK Global Chemical and Zhejiang Satellite, both the companies will come together to form a joint company which will be responsible for the production and sales of ethylene acrylic acid. SK Global Chemical and Zhejiang Satellite are also planning to build an eco-friendly, high value-added packaging material plant in Lianyungang, China.
China – SK Global Chemical, a subsidiary of SK Innovation, took a step forward to expand its eco-friendly, high value-added packaging material business as the first move to engage in its financial story towards eco-friendly ESG.
SK Global Chemical recently signed a MOU with Zhejiang Satellite, a Chinese chemical company, for the establishment of a joint company that will be responsible for the production and sales of ethylene acrylic acid (hereinafter referred to as EAA), a sort of adhesive copolymers.
This joint company will be established this year with six to four contributions of SK Global Chemical and Zhejiang Satellite, respectively. This move is aimed at preoccupying the Chinese and Asian markets through the strategic ties of SK Global Chemical’s EAA production technology and sales channels, and Zhejiang Satellite’s stable source of raw materials.
Ever since the acquisition of the EAA business from Dow Chemical Company in 2017, it had been SK Global Chemical’s goal to expand the high value-added packaging material business, mainly in emerging countries in Asia including China. By securing the EAA plant in Lianyungang, China, SK Global Chemical will be able to complete the triangular formation of global high value-added materials production bases in USA, Europe and Asia. Two other EAA plants of SK Global include one in Texas, the U.S., and one in Tarragona, Spain.
SK Global Chemical shared that this strategic investment reflects the surging demand for EAA materials* in emerging Asian countries, including China. The packaging materials market for fresh food has been rapidly growing due to the high demand for boxed or delivered foods in China. SK Global Chemical’s EAA materials are renowned for their green packaging technologies in the growing fresh food packaging materials market.
Luanyungang, China, the new land for EAA factories, has recently started creating a massive eco-friendly chemical and industrial complex. It is expected to grow into the No. 1 chemical and industrial complex in China. The site has been selected for its advantageous location near the exporting and importing infrastructure and utilities such as the power grid and waste-water disposal, as well as a stable source of ethylene, one of the key ingredients.
SK Global Chemical plans to build its first EAA plant in China a bridgehead to preoccupying the eco-friendly, high value-added packaging markets in Asia, and develop it into a hub for eco-friendly chemical materials.
“Going toward the core of our financial story, More Green, Less Carbon, we are accelerating the expansion of eco-friendly, high value-added packaging business, and economic circulation system for plastics,” said Na Kyung-soo, the CEO of SK Global Chemical. “We will also take the lead in building an ecosystem for eco-friendly chemical materials that take consideration from the production to recycling.”