Lotte Chemical Precision, 3Q Operating Profit 70.2 Billion KRW... Up 171% YoY

[Asia Economy Reporter Hwang Yoon-joo] Lotte Fine Chemical announced on the 28th that its consolidated operating profit for the third quarter of this year reached 70.2 billion KRW, a 171% increase compared to the same period last year. During the same period, sales increased by 55.4% to 492.1 billion KRW.

Lotte Fine Chemical stated, "Due to increased demand across industries following COVID-19, combined with power shortages in China and production disruptions among competitors caused by hurricanes in the U.S., product prices rose. As a result, third-quarter sales increased by 16.7% compared to the previous quarter’s record-high sales, setting a new quarterly sales record once again."

By division, the Chemical Business Division recorded sales of 390.4 billion KRW, a 70.5% increase compared to the same period last year. This was influenced by the rise in international prices due to supply shortages caused by production disruptions among major producers of ammonia, caustic soda used across industries, and ECH (a raw material for epoxy coatings) used in front industries such as construction and shipbuilding.

The Green Materials Business Division posted sales of 101.7 billion KRW, a 16.0% increase compared to the same period last year. This was due to expanded production capacity following the completion of a cellulose-related factory expansion in the first half, which led to increased sales volume driven by the recovery of the global construction market and rising demand in the plant-based food and pharmaceutical markets, its front industries.

Meanwhile, Lotte Fine Chemical has announced plans to invest a total of 180 billion KRW in eco-friendly cellulose-related businesses. In the second quarter, it completed 140 billion KRW of this investment as scheduled. Specifically, this includes 115 billion KRW for the expansion of the Mescellose (cement additive) factory and 23.9 billion KRW for the expansion of the Anycoat (plant-based pharmaceutical capsule raw material) factory. By the first half of next year, it plans to complete an additional 37 billion KRW investment for the expansion of the food and pharmaceutical factory.

Lotte Fine Chemical stated, "As product demand continues to expand across industries and competitors’ production disruptions have led to rising international prices, sales in the Chemical Business Division have grown. We will also continue efforts to enhance profitability of high value-added products, such as expanding sales of the cellulose products from the Green Materials Business Division’s expansion completed in the first half."