Lotte Chemical is estimating that the operating profit ratio of Ethane Cracker Center (ECC) in U.S. will be 20-30%. Regarding the possibility of making additional investments in the U.S., he said, "We are currently reviewing it."
"Although it is not as good as expected since ethylene prices are falling, ECC is competitive," said Kim Kyo-hyun, head of Lotte's chemical business division, before a meeting of chemical business unit (BU) presidents held on July 18.
Asked whether Lotte Chemical would invest in the U.S. in addition to the ECC plant, he replied, "We are considering it."
Lotte Chemical has the capacity to produce 4.5 million tons of ethylene a year on a global basis. It ranks first among domestic companies and seventh in the world. The ECC plant is responsible for 1 million tons of production out of the total, with 800 billion won in annual sales expected.
In May, Lotte Chemical invested $3.1 billion (about 3.65 trillion won) in total business expenses to complete the ECC. It is the first time that a South Korean chemical company has built and operated a large petrochemical complex in the U.S.
At that time, U.S. President Donald Trump also assessed the investment as "a victory for the U.S., a victory for South Korea and a testament to the strength of our bilateral alliance."
Meanwhile, when asked about his plan to acquire a 10 percent stake in Lotte Advanced Materials owned by Samsung SDI, Kim replied, "We will purchase all of the shares." Asked about the timing of the acquisition, he said, "I think we need to review the situation."
Lim Byung-yeon, CEO of Lotte Chemical, also said., "Since we have made the plan, we will share strategy and discuss how to achieve it."
In 2016, Lotte acquired Samsung Precision Chemical and Samsung SDI's chemical division, respectively, and established Lotte Precision Chemical and Lotte Advanced Materials.