South Korea's LG Group's chemical and battery manufacturing plant, LG Chemical, said on Monday that it will increase production of acrylonitrile-butadiene-styrene copolymer (ABS) in the near future.
The company said it would invest $ 100 million to double its annual ABS capacity at its Huizhou plant in Guangdong, from the current 150,000 tons to 300,000 tons. The plant is jointly owned by LG Chemical and CNOOC in a 50:50 format. The expansion of the new facility will be solely invested by LG Chem, which will make it account for 70% of the shares and have independent management rights. The construction is planned to be completed by the end of next year.
LG Chemical said that the expansion of the Huizhou plant, combined with the optimization and upgrade of other plants in South Korea and China, will increase the company's annual ABS output to 2 million tons, ranking first in the world. The overall production expansion will also increase the company's market share from the current 21% to 26%.
ABS is a special plastic that is more resistant to external shocks and heat than ordinary plastics. It is widely used in IT and automotive products and household appliances. Only a few manufacturers with high-end technology have the ability to produce, which is why their profit margins can be as high as 10%.
In addition to capacity expansion, LG Chem also plans to optimize its Ningbo Yongxing plant and increase its current output of 760,000 tons to 800,000 tons. The Yongxing plant is jointly established by LG Chemical and China Yongxing Group, with LG holding 75% of the shares. The Yongxing plant is responsible for the demand for ABS orders in the Northeast region, while the Huizhou plant is connected to the demand in the Southwest region.