SK chemicals and SK Global are planning to open a PET factory in Poland with an annual production capacity of 100,000 tons of PET chips. The equity share of the factory will be 60% by SK chemicals, 10% by SK Global, and 30% by a Polish business.This will be a landmark decision as it is the first case of a Korean petrochemical business?s advance into the European market. With the opening of this joint-venture factory, SK chemicals? PET chip production capacity will increase to a yearly 300,000 tons from the present 190,000 tons.SK expects that it can sign an MOU with its Polish partner in the first quarter of this year and finalize details on location, size, and raw material suppliers for the factory. It plans to start laying the groundwork for the factory in the first half this year.SK Global will be in charge of supplying raw materials for the factory from local sources through its branch in Poland and sales through its network in Europe, while factory production and operations will be the responsibility of SK chemicals.A source at SK chemicals says, ?Asia is in a state of glut concerning PET chip, and that made us look to Europe for a new market. With completion of the factory, we will be able to enjoy reduction in import duties (8% import duty paid thus far) and ocean transportation costs. This is expected to provide us an important turning point in cost-competitiveness.? He also added that the Polish industry also welcomed the opening of the factory as it has depended on import for 70 to 80% of the PET chips it needs.SK?s positive advancement into Eastern Europe is seen as part of its strategy to cope with the changing environment in the EU, which seeks economic integration through the unity of its currency.It is also reported that SK plans to expand into other eastern and western European countries if its investment in the Polish factory proves to be successful.- Maeil Business Newspaper -