By Liz White, UT International editor
Seoul - Korean-based suppliers of polyurethane raw materials, together with producers of polyurethane products, have seen their businesses affected by the rapid rise of China as a producing region in the last decade.
But in interviews during the International Polyurethane Forum 2007 in Seoul, it became apparent that Korean companies are now also taking advantage of the Chinese boom to set up raw material production plants and foam-making units in the country, and compensate for slow growth in their domestic markets by participating in China's still rapid expansion.
Korea Polyol Co. Ltd, the country's largest producer of polyether polyols, set up a 35 kilotonnes-per-annum (ktpa) polyols plant in Nanjing last year, said Harrison Lim, senior research engineer. This Korea Polyol Nanjing Co. unit was finished last year and KPC aims to raise its capacity to 50 ktpa by mid-2008, Lim said.
Although KPC is the biggest domestic polyol producer, with a 61 percent market share, Lim said the challenge for the business is to keep its lion's share of the market - one that it has had for over 30 years. Setting up in China is one way of generating more sales for the Ulsan-based firm, he indicated.
Having finished the Nanjing plant last year, KPC is looking at the possibilities for further expansion, and is examining the potential in India, which is a good market for polyurethane, Lim commented.
Major Korean foam producer Serim TTC has also set up two operations in China, buying local foam makers and developing their operations, said Serim managing director Dr Sung Tek Lim, in a 22 May interview at the Korean meeting. Demand for flexible foam in Korea is rather flat, while in China it is expanding at 10 percent a year, and in Indonesia, where Serim also has a plant, growth rates are similar to those in China, Lim said.
This strategy of investing in new operations outside Korea will continue, Serim's Lim said, adding, "Some time in the future, we will go into the Indian market."
Meanwhile Kumho Petrochemical, a major in plastics and rubbers, but a small polyol producer, is in the process of constructing an 80 ktpa propylene oxide plant in Nanjing, in a 50:50 joint venture with Chinese partner GPRO. This unit will also have a 50 ktpa polyether polyols plant, said Dr Seung Su Kim, senior vice-president and research director.
The Nanjing unit is scheduled for start-up in March next year, and Kumho Petrochemical aims to develop the Chinese market for its polyols and systems, using the extensive contacts it has with local refrigerator makers via supplying polystyrene for refrigerator linings, Kim said.
Further plans for Kumho Petrochemicals polyols business are to expand in added-value CASE (coatings, adhesives, sealants and elastomer) polyols and systems for the local market, said Kim, who also currently chairs the Korean Polyurethane Society's international cooperation committee.
PIC: Serim's Sung Tek Lim: examining potential in India."