SEOUL -- LG Chem, a chemical unit of South Korea's LG Group, earmarked 2.6 trillion won ($2.21 billion) for new investment to expand the production of eco-friendly materials and accelerate the introduction of environmental, social, and corporate governance (ESG), a trendy corporate operation method that focuses on the use of green energy and environmentally-friendly management.
LG Chem said it would foster its production base in Daesan, about 100 kilometers (62 miles) southwest of Seoul, as an ESG business mecca for the production of bio and eco-friendly materials, waste plastic recycling, and greenhouse gas reduction by 2028.
In Daesan, the company would build a polybutylene adipate terephthalate (PBAT) plant with an annual capacity of 50,000 tons and a new polyolefin elastomer (POE) plant capable of producing 100,000 tons per year. Commercial production will begin in 2024. LG Chem currently has a 280,000-ton POE factory in Daesan.
PBAT is a biodegradable random copolymer marketed as a fully biodegradable alternative to low-density polyethylene. It is ideal for combination with other biodegradable polymers that have high elastic modulus and strength. POEs offer unique performance capabilities for compounded products and are used in automotive exteriors and interiors, wire and cable coatings, films, medical products, adhesives, footwear and foams.
"This investment agreement is part of a sustainable growth strategy and signals the full-fledged start of eco-friendly material businesses," LG Chem CEO Shin Hak-cheol said in a statement on August 19. LG Chem has developed new biodegradable materials that can be used for plastic bags, air cap buffers, disposable cups and foaming products. Bioplastics can be made from agricultural by-products and also from used plastic bottles and other containers using microorganisms.
In October 2020, LG Chem developed a new biodegradable material using corn-based glucose and crude glycerol that can realize mechanical properties equivalent to synthetic resins. A month later, the company partnered with Neste, a leading biodiesel producer based in Finland, to accelerate the production of eco-friendly materials. Neste's bio-based raw materials are produced from vegetable oils such as renewable waste cooking oil and palm oil.
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