Lotte Chemical to Invest 250 Billion KRW to Expand EOA at Daesan Plant

2023 Year-End Commercial Production Target
Expansion of 250,000 Tons of HPEO, the Raw Material for EOA

[Asia Economy Reporter Hwang Yoon-joo] Lotte Chemical announced on the 17th that it will invest 250 billion KRW to expand the production line of ethylene oxide derivatives (EOA), a specialty material for construction, at its Daesan plant. The company plans to add an EOA plant with an annual capacity of 150,000 tons, targeting commercial production in 2023. Additionally, it has decided to expand the high-purity ethylene oxide (HPEO), which is used as a raw material for EOA, to a capacity of 250,000 tons.

Currently, Lotte Chemical's annual EOA production amounts to a total of 330,000 tons, including 230,000 tons at the Yeosu plant, 50,000 tons at the Daesan plant, and 50,000 tons at the Jiaxing plant in China. Upon completion of this expansion, the future production capacity will significantly increase to 480,000 tons per year.

EOA is a high-value specialty material used as a raw material for water-reducing agents, a type of admixture added to concrete during the construction of large structures such as high-rise buildings, bridges, and dams. It is produced by oxidizing ethylene to ethylene oxide (EO), then catalyzing and reacting it with alcohol raw materials. When water-reducing agents made from EOA are added to concrete, water usage is reduced by 30% compared to conventional methods, concrete strength is improved, and fluidity is maintained during transportation, facilitating long-distance transport.

Hwang Jin-gu, Head of the Basic Materials Business, stated, "We plan to continuously strengthen our specialty materials business, which contributes to high global growth potential and stable operating profit generation, including EOA. Based on product diversification tailored to customer applications, we will expand sales capabilities in existing key markets such as India, Turkey, and China, actively develop new clients in the Americas and Europe, and strive to enhance global market share and profitability through strategic sales of the expanded EOA volume."

With the recent revitalization of the global construction market, the market for concrete water-reducing agents is expected to grow steadily at an average annual rate of 5%. Lotte Chemical's EOA product serves over 40 overseas markets including Turkey, India, the Middle East, South America, Europe, Africa, and North America. As demand for the product has increased mainly in developing countries, Lotte Chemical has anticipated the growth potential of the EOA market and has been proactively investing.

Accordingly, in 2019, the company invested 120 billion KRW to expand the EOA production line with an annual capacity of 100,000 tons at Yeosu Plant 4, which was completed in January this year and began commercial production. Through this expansion investment at the Daesan plant, Lotte Chemical plans to strengthen vertical integration from raw materials to EOA product manufacturing at each site, securing higher cost competitiveness compared to competitors and accelerating domestic and overseas market penetration.