POSCO Chemical and OCI Venture into New Hydrogen Peroxide Business

Establishing a Joint Venture to Produce 50,000 Tons of Hydrogen Peroxide Annually

[Asia Economy Reporter Hwang Yoon-joo] POSCO Chemical is establishing a joint venture with OCI to produce ultra-high purity hydrogen peroxide used in semiconductor manufacturing processes. The two companies, sharing a common ground in the coal chemical business, plan to closely collaborate in the high value-added materials sector to seek growth.

POSCO Chemical and OCI signed a contract on the 21st to establish a joint venture for the production of electronic-grade hydrogen peroxide. The joint venture is scheduled to be established in the second quarter of 2020, with POSCO Chemical investing 51% and OCI 49% of the shares.

Through the joint venture, the companies will build a hydrogen peroxide production plant with an annual capacity of 50,000 tons on a 42,000㎡ site within OCI's Gwangyang plant. Hydrogen peroxide will be manufactured using hydrogen extracted from coke oven gas (COG), a byproduct of the steelmaking process, with the key raw material COG supplied by the Gwangyang Steelworks. Construction of the production plant will begin this year, with commercial production planned to start in 2022.

Hydrogen peroxide (H2O2) is an eco-friendly oxidizer widely used in bleaches and cleaning agents. In particular, electronic-grade ultra-high purity products are one of the essential materials used in semiconductor and display manufacturing processes.

The two companies explained the background of the project, stating, "We established the joint venture to seize the opportunity presented by the rapidly increasing demand for ultra-high purity hydrogen peroxide due to large-scale production facility expansions by major semiconductor companies, and to stably supply essential materials for domestic semiconductor industry processes."

This joint investment is expected to create a 'win-win effect' for both companies' chemical businesses. POSCO Chemical maximizes added value by producing chemical products using byproducts from steelmaking processes as raw materials. Following cathode and anode materials for secondary batteries and needle coke, the company plans to strengthen its materials business portfolio and expand into the comprehensive chemical sector.

OCI, on the other hand, will be able to secure high-quality raw materials stably and economically, further enhancing its competitiveness and market position in the hydrogen peroxide business it has operated since 1979.

Prior to this joint venture, the two companies signed a strategic business cooperation MOU in April 2019, announcing plans to pursue various joint projects. The establishment of the hydrogen peroxide joint venture is expected to further strengthen their cooperative relationship. Through a long-term partnership, they plan to promote various materials businesses utilizing POSCO Chemical's steelmaking byproducts as raw materials.

Min Kyung-jun, CEO of POSCO Chemical, said, "This is the result of efforts to advance our business model centered on high value-added chemicals and materials," emphasizing, "We will continue to create new business opportunities and generate profits through the synergy of POSCO Chemical's strategy to maximize the added value of chemical raw materials and OCI's global marketing network."

Kim Taek-jung, CEO of OCI, stated, "We are pleased to form a partnership to jointly seek high value-added growth in the hydrogen peroxide business," adding, "Starting with the establishment of this joint venture, we will continuously review and pursue various joint business opportunities with POSCO Chemical."