LOTTE Chemical Invests in Expanding Daesan Plant EOA

■ Strengthen vertical integration between raw materials and products through the expansion, thereby improving cost-competitiveness and actively targeting overseas markets
■ Basic Materials President Hwang Jin-koo, "We will strengthen profitability by expanding our high value specialty product portfolio and strategic market pioneering"

On the 17th, LOTTE Chemical (Basic Materials President Hwang Jin-koo) announced that it would expand its construction specialty material called EOA (Ethylene Oxide Adduct) production line at the Daesan Plant.

Plans are to invest a total of 250 billion KRW and an EOA plant with an annual production of 150,000 tons with the goal of beginning commercial production by 2023. In addition, HPEO (High Purity Ethylene Oxide) that will be injected as the raw materials for EOA will also be increased to 250,000 tons.

The current annual EOA yield of LOTTE Chemical is 230,000 tons from the Yeosu Plant, 50,000 tons from the Daesan Plant, and 50,000 tons from the Jiaxing Plant in China for a total of 330,000 tons. Once this expansion is completed, production will increase significantly to 480,000 tons annually.

EOA is a high value specialty material used for construction as the raw materials of water reducing agents, which are a type of compound added to concrete for constructing large structures such as skyscrapers, bridges, and dams. It is produced by adding a catalyst to EO (Ethylene Oxide) made by oxidizing ethylene and reacting it with alcohol materials. By adding water reducing agents made using EOA to the concrete, water usage can be reduced by 30%, strengthen the intensity of concrete, and even make long-distance transportation easier by maintaining liquidity in the transportation process.

Basic Materials President Hwang Jin-koo stated, “We are planning to continuously reinforce specialty materials businesses, including EOA, that will contribute to high global growth potential and stable creation of operating profits,” while adding, “We will expand the business capacities of our existing core markets such as India, Turkey and China through product diversification tailored to the needs of our clients, while also striving to increase our global market share and profitability through strategic sales of the expanded EOA yield by actively targeting new business opportunities such as in the Americas and Europe.

With the recent growth in the global construction market, the concrete water reducing agent market is expected to continuously grow at an annual average of approximately 5%. LOTTE Chemical EOA is a product exported to over 40 countries including Turkey, India, South America, Europe, Africa, and North America, and as demand for the product has been growing recently among developing countries, LOTTE Chemical judged that there is growth potential for the EOA market and has thus been pursuing preemptive investments.

Back in 2019, 120 billion KRW was invested to expand the EOA production line with annual production of 100,000 tons at the Yeosu Plant 4 and began commercial production by completing the construction in January of this year. Through this expansion investment at the Daesan Plant, the vertical integration from raw materials to EOA production for each workplace will be reinforced as part of the company’s plans to procure relatively high cost-competitiveness, while simultaneously putting the spurs to pioneering domestic and foreign markets.