Korea’s petchem companies pursue emerging markets, high margin products

South Korea’s petrochemical companies are transforming their businesses by focusing their overseas investments in emerging markets, as well as increasing their domestic investments in higher margin products. Korean companies are investing in emerging markets, such as in India, where GS Caltex is investing in expanding its lubricating oil business by establishing a sales subsidiary in Mumbai, and in Uzbekistan, where Honam Petrochemical is set to begin a joint oil and gas exploration project with state-owned Uzbekneftegas and is studying the possibility of a JV. Honam is also considering a joint project to produce polyethylene terephthalate in Russia. On the domestic front, investments are being funneled into high-margin products, particularly those related to lithium-ion secondary batteries and solar cells, to catch up with the Japanese companies that now dominate these markets. SK Energy is actively promoting its Li-ion-battery separators, while GS Caltex is investigating carbon materials other than carbon black to develop anode materials. (March 11, 2010)