SK geo centric to build EAA plant with China's Satellite Chemical

On Monday, SK geo centric and Satellite Chemical signed a joint venture agreement to invest a total of 290 billion won to build an EAA factory in a petrochemicals production complex in Lianyungang, China.

SK geo centric and China's Satellilte Chemical signed a joint venture agreement in Lianyungang, China, on Monday, with SK geo centric CEO Na Kyung-soo, right on the screen, attending the ceremony online. [SK GEO CENTRIC]

SK geo centric will establish a 290-billion-won ($222 million) joint venture with China's Satellite Chemical to build a production plant for ethylene acrylic acid (EAA), a chemical used for packaging, the local chemical company said Tuesday.

Satellite Chemical, formerly Zhejiang Satellite, is an acrylic acid manufacturer based in Zhejiang, China.

On Monday, SK geo centric and Satellite Chemical signed a joint venture agreement to invest a total of 290 billion won to build an EAA factory in a petrochemicals production complex in Lianyungang, in China’s eastern Jiangsu Province. The agreement came a year and a half after the companies signed a memorandum of understanding for the project in March 2021.

The joint venture will be 60 percent owned by SK geo centric, with Satellite Chemical holding the rest. SK geo centric will oversee the production with its technologies, while Satellite will take charge of the feedstock procurement.

The construction is scheduled to be completed by the first half of 2024. The factory will produce 40,000 tons of EAA copolymer a year, according to SK geo centric.

EAA copolymer is a high-margin chemical product used as an adhesive for flexible packaging materials and metal coating. It is applied in a wide variety of sectors including food packaging and electric vehicle batteries, and is considered eco-friendly as it facilitates plastic recycling.

SK geo centric, formerly SK Global Chemical, is a wholly owned subsidiary of SK Innovation. The company acquired the EAA business from Midland, Michigan-based Dow Chemical in September 2017 for $370 million.

SK geo centric has EAA production bases in Texas, the United States and Tarragona, Spain.

“Through our EAA production plant in China, which is the only one of such kind in the country, we will take the lead in the Chinese and Asian market,” said SK geo centric CEO Na Kyung-soo.

“By actively utilizing SK geo centric’s technologies and marketing capabilities in the Asian region, we will become a global eco-friendly material company while enhancing our high-value-added chemical products portfolio,” said Na.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]