Establishment of PBAT Production Line in Korea
Start of Mass Production in the Second Half of 2022
[Asia Economy Reporter Hwang Yoon-joo] LG Chem is partnering with TK Chemical to produce biodegradable plastics.
LG Chem announced on the 12th that it signed a Memorandum of Understanding (MOU) for the development and business cooperation of eco-friendly biodegradable materials (PBAT) with TK Chemical, a subsidiary of the SM Group, at the LG Twin Towers in Yeouido on the 10th.
PBAT (Poly Butylene Adipate-co-Terephthalate) is a petroleum-based synthetic plastic that rapidly decomposes in nature through reactions with oxygen, heat, light, and enzymes. It is an eco-friendly material that naturally decomposes within six months when buried in soil. It is applied to various materials such as agricultural vinyl and disposable bags.
TK Chemical is a domestic chemical fiber material specialist company manufacturing polyester (PET), PET chips, spandex, and more. Its main business, PET, leads the domestic market based on differentiated quality.
The two companies plan to sign a formal contract within this year and aim to establish a PBAT production line and start product manufacturing in Korea by the second half of 2022.
Although specific production scale details cannot be disclosed due to the agreement between the two companies, TK Chemical plans to build the PBAT line based on its stable polyester (PET) facility operation capabilities.
This MOU aligns the interests of LG Chem, which is actively shifting its business structure toward eco-friendly materials, and TK Chemical, which is seeking new growth engines beyond its existing polyester-centered business.
Through this cooperation, LG Chem will not only expand its portfolio of eco-friendly products but also accelerate the market entry of PBAT products through strategic investment.
Last month, LG Chem announced the groundbreaking of a PBAT plant with an annual capacity of 50,000 tons at its Daesan plant, aiming to start full-scale mass production from 2024.
The two companies will discuss various cooperation plans across the eco-friendly materials business, including establishing a mass production system for eco-friendly biodegradable materials such as marine biodegradable materials (PBSAT) currently being developed by LG Chem.
No Kuk-rae, head of LG Chem’s Petrochemical Business Division, said, "Through cooperation with TK Chemical, we have secured differentiated competitiveness in the biodegradable plastics market. We will continue to strengthen our portfolio of eco-friendly products by promoting comprehensive collaboration with various companies in the sustainability field."
Han Pan added that since 2019, TK Chemical has established a circular system to collect and recycle PET bottles discharged domestically through MOUs with the Ministry of Environment, local governments, and various companies.
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