By Simon Robinson, Korea
Seoul -- SKC is planning to expand propylene oxide production with mechanical completion of a new plant at Ulsan, Korea, targeted for the second quarter of 2017.
The move comes as part of SKC’s drive to become a world scale player in propylene oxide and derivatives such as polyols, said Ki Don (KD) Won, president of chemical business SKC.
Won was speaking exclusively to UTECH-polyurethane.com at the company's headquarters.
In addition to the capacity expansion, Won added that competition from low-cost Chinese producers of polyols is driving his firm to move into specialty polyols.
SKC will increase production of propylene oxide from 310kT/year to "at least 600 or 700 kT/year," said Won. The project is currently at the feasibility stage, Won says propylene oxide business is already working with a potential partner and the site preparation was finished in November. Once the project is complete, Won says "we will become an economic, world scale provider of PO."
“Our newly produced propylene oxide will meet our incremental demand for polyol and propylene glycol, and also replace most of the propylene oxide which is imported to Korea. In addition, we hope to reduce the gap caused by POSM plant shut downs in Japan in the next couple of years.” he said.
SKC's figures suggest that with 310kT /year propylene oxide production, SKC has 66% of the Korean market. Its 220kT/year polyol production gives SKC has 29% of Korean market. The firm also makes 110kT/year a propylene glycol giving it SKC 64% of Korean market in that material.
SKC will get the propylene to its needs for the new propylene oxide in 2017, which at the feasibility studies stage, from SK Gas a neighbouring company which is building is under a propane dehydrogenation (PDH) process unit. This firm imports its raw materials from the Middle East. "So we will have cost-competitive propylene in Ulsan,” said Won.
Part of the drive for more specialty grades comes from the threats of China's low-cost production which can be shipped cheaply to Korea.
"The competition is getting higher and higher for commodity slab stock polyols. Growth in Chinese polyol production is jeopardising the Korean market and we don't see any profit in the near future for commodity grades, so we are shifting focus to the specialty market for products like elastomers and high-performance insulation," said Won.
Look out for more on Korea in the coming weeks.
