Export-Import Bank Provides $90 Million to Hyosung Chemical's Vietnam Production Facility

Korea Eximbank
/Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Park Sun-mi] The Export-Import Bank of Korea announced on the 24th that it has arranged a syndication loan worth a total of $215 million for the chemical product manufacturing facility that Hyosung Chemical is constructing in Vietnam, and will directly provide $90 million of the financing.

The syndication, for which the Export-Import Bank of Korea served as the Mandated Lead Arranger (MLA), involved five domestic financial institutions including the bank itself.

This project involves Hyosung Chemical building an integrated production facility for manufacturing 600,000 tons per year of polypropylene (PP) in the Ba Ria-Vung Tau region in southern Vietnam.

Upon completion in 2021, Hyosung Chemical's annual polypropylene production capacity is expected to nearly double from the current 650,000 tons to 1.25 million tons. Recently, due to shale gas development and falling oil prices, global petrochemical companies are fiercely competing to enter new markets and expand production facilities.

Hyosung Chemical has been dedicated to advancing this project, including signing a Memorandum of Understanding (MOU) with the Vietnamese government in 2017.

Vietnam is regarded as an optimal location for capturing the Southeast Asian market due to its geographic advantage at the center of ASEAN and regional tariff benefits. The Southeast Asian region, with high growth potential, is seeing continuous increases in demand for versatile polypropylene used in everything from industrial goods to general consumer products. Once the facility is completed, it is expected that Hyosung Chemical will gain a significant market lead.

An official from the Export-Import Bank of Korea stated, “In response to the global trend of expanding protectionism, it is necessary to pioneer overseas new markets with high growth potential and strengthen the competitiveness of basic industries such as materials, parts, and equipment. Through this syndication loan involving five domestic banks, we have fostered our companies’ materials industry that is advancing into the Southeast Asian market while solidifying the economic partnership with Vietnam, a key country in the New Southern Policy.”