SK Geo Centric (SKGC) plans to expand its reach into the global market with its highly valuable chemical material, Ethylene Acrylic Acid (EAA).
The company already has EAA factories operating in the United States and Spain, and it is now planning to establish a new factory in China. This will secure SKGC's position as the only EAA production base in Asia.
On March 22, SKGC signed a memorandum of understanding (MOU) with Zhejiang Satellite Petrochemical (STL) in Lianyungang, Jiangsu Province, China, to build a new EAA plant. The agreement ceremony was attended by SKGC CEO Na Kyung-soo, Head of SKGC China Business Division Jang Nam-hun, Head of SKGC China Investment Management Department Cai Lian Chun, STL Chairman Yang Wei Dong, and Director of STL Zhu Xiao Dong.
SKGC and STL had previously signed an establishment and investment agreement in August of last year to form a joint venture for the global EAA Plant 3. Plant 3 is currently undergoing Engineering, Procurement, and Construction (EPC) and is expected to be completed by 2025.
SKGC plans to move forward with the establishment of EAA Plant 4, which is scheduled to begin construction in the second half of next year with an investment of USD 40 billion. The plant is expected to commence commercial production in 2028, with a targeted annual production capacity of 50,000 tons.
Upon completion of EAA Plant 4, SKGC's global production capacity for EAA will increase to 140,000 tons per year, allowing the company to capture the Asian market preemptively. SKGC acquired Dow Chemical Company's EAA business in 2017 and has been operating manufacturing plants in Texas, the U.S., and Tarragona, Spain.
EAA is a type of high-performance adhesive copolymer resin produced by only a handful of global chemical companies. SKGC specializes in the commercial production of High Acid EAA, a high-quality product grade that exhibits outstanding adhesive performance.
EAA is used in various industries, including sterilized packs and vacuum packing for meat products, golf balls, and tempered glass. One of the benefits of EAA is that it can replace existing plastic materials used for paper-coating, which is expected to generate more demand from the market in the future.
“We are expecting that this construction agreement for the new EAA plant will enable SKGC to preemptively respond to global demand,” said CEO of SKGC Na Kyung-soo. We will secure world-class competitiveness in producing high value-added chemical materials by enabling the early commercial production of the plant, and actively expand our product portfolio as well,” CEO Na added.
