SK Geocentric to Establish High-Value EAA Material Plant in Asia

Contract Signed on the 8th for Joint Venture with Chinese Chemical Company Weixing Petrochemical to Produce High-Value Chemical Product EAA

Na Kyung-soo, President of SK Geocentric, is giving a congratulatory speech at the signing ceremony for the establishment of a joint venture with Chinese chemical company Weixing Chemical for EAA production on the 8th. Photo by SK Innovation

[Asia Economy Reporter Donghoon Jeong] SK Geocentric is investing 290 billion KRW to secure a production plant for the high value-added chemical material 'Ethylene Acrylic Acid (EAA)' in Jiangsu Province, China.

On the 9th, SK Geocentric announced that it signed a contract to establish a joint venture for EAA production with Chinese chemical company Weixing Chemical and signed an investment agreement at the Lianyungang Shuiwei Petrochemical Complex.

SK Geocentric and Weixing Chemical will establish a joint venture with a 60:40 ratio and invest approximately 290 billion KRW to build an EAA production plant on about 66,000㎡ (approximately 20,000 pyeong) of land within the petrochemical complex located in Lianyungang, Jiangsu Province, China. The plant is scheduled to be completed in the first half of 2025 and begin commercial production with an annual capacity of 40,000 tons. The joint venture plans to produce EAA by combining raw materials supplied by Weixing Chemical with SK's proprietary processing technology and plant operation know-how.

The joint venture establishment contract and investment agreement signing ceremony held at the Lianyungang Taruchao International Conference Center Hotel was attended by Na Kyungsoo, President of SK Geocentric (via video conference), Matsuguang, Party Secretary of Lianyungang City, and Yang Wedong, President of Weixing Chemical, among others.

EAA is a high value-added chemical material with high technological entry barriers, with 3 to 4 global major chemical companies, including SK Geocentric, accounting for more than 80% of the world's supply volume. It is a type of high-performance adhesive resin that exhibits excellent bonding performance between dissimilar materials such as metal and plastic, paper and plastic.

Due to its excellent durability, transparency, and adhesion, its utilization is increasing in various industries ranging from sterilized packs and vacuum packaging for meat to golf balls and tempered glass. When used in electric vehicle battery electrodes and membranes, it is expected to improve stability, and demand is increasing as storage periods are extended when used for vacuum packaging of meat and other products. In particular, it is gaining attention as an eco-friendly material that reduces plastic usage and increases recycling rates due to its excellent bonding performance and ease of separation, and demand creation in more applications is expected in the future.

SK Geocentric acquired the EAA business from Dow Chemical in the United States in 2017, securing production bases in Texas, USA, and Tarragona, Spain. Especially at the Spanish plant, it succeeded in independently researching, developing, and producing 'Ionomer,' a chemical material combining sodium, ions, and other metal ions with EAA for the first time in Korea, expanding new businesses as well.

With the establishment contract of the joint venture with Weixing Chemical in China, SK Geocentric plans to flexibly respond to various global demands by securing production facilities in Asia following the United States and Europe. Starting with the first production plant in China, it plans to target increasing regional demand by reviewing additional expansions in China and Asia depending on the growth trend of related businesses.