●SK chemicals Gets Green Light in Its PPS Business

- SK chemicals Signs Super Engineering Plastic Supply Deal with A. Schulman
- SK chemicals Seeks to Gain 20% Share in Global PPS Market by 2020


SK chemicals gets a green light for its super engineering plastic project, considered one of the most important future growth engines for the company.

The Korean company said on October 14 that Initz, its joint venture with Japan’s Teijin Limited, has recently signed a supply and marketing agreement with A. Schulman, Inc., the world’s leading plastics supplier based in the United States, for polyphenylene sulfide (PPS).

A. Schulman is a large chemical company with production and sales networks in 43 locations worldwide, supplying high-functional plastics in resin and compound forms. Under the terms of the contract, Initz will deliver PPS output produced in its Ulsan plant to A. Schulman, which will in turn reprocess it in compound forms for sale in the United States and Europe.

This is the first deal signed since last year when SK chemicals established the joint venture business with Teijin. This is also the first occasion for Korean chemical company to sign a supply contract with a major international company for super engineering plastic materials.

Polyphenylene sulfide, or PPS for short, is a kind of super engineering plastic with properties capable of withstanding high-temperature conditions. It can be molded, extruded, or machined to close tolerances. SK chemicals is the first company in Korea to develop PPS.

The joint venture in Ulsan in Korea’s southeast has an annual capacity of 12,000 tons, with plans to ramp up to mass-produce PPS beginning in the third quarter of 2015. In the long run, the company will expand its capacity to 20,000 tons.

With the joint marketing deal with A. Schulman, SK chemicals will be able to secure a stable outlet for its PPS output. In general, most new investment projects in the chemical industry take years to find customers even after completion of large-scale production capacity. Fortunately for SK chemicals it took only one year after establishing the production system to secure a large outlet for its output.

Kim Hyo-kyung, president of Initz, said, “A. Schulman is a company with long years of experience in the area of supplying high-quality chemical compounds to major customers in Europe and North America in industrial sectors such as automotive, electrical, and electronic industries. It also boasts high levels of compound technical know-how, production facilities, and a high-caliber workforce.” “With the partnership with A. Schulman, we will be able to achieve our business objectives by capitalizing on the marketing networks in Europe and North America.

A. Schulman decided to sign the contract because of “Ecotran,” the world’s first PPS made without using chlorine and solvent in the production process. Bernard Rzepka, executive vice president at A. Schulman, Inc., said, “A. Schulman was attracted to the latest contract with SK chemicals because of its environmentally friendly production process that doesn’t rely on chlorine or harmful solvents. PPS is a promising business with a high-growth outlook in North America and Europe, and has a higher profit margin that any other high-functionality materials.”

Ecotran®, the PPS brand of SK chemicals developed after eight years of R&D, is free from chlorine and solvent in its production and other processes. Chlorine and solvents are substances strictly regulated in the EU and known to cause malfunctions in sensitive electrical devices. In addition, PPS products made in processes using chlorine must make use of solvents in the production process and eventually generate byproducts that contain sodium which oxidizes metals.

Kim Cheol, CEO of SK chemicals, said, “With today’s contract, SK chemicals will have two major partners in the United States and Japan. By highlighting the world’s first chlorine-free PPS, we will try to bring up the global market share to 20 percent by 2020 through close cooperation with our partners.”

Established in 1928 in Fairlawn, Ohio, A. Schulman has 3,800 employees in 43 production and sales locations across the world. The company is known to have particularly strong capabilities in the area of compounds.



[Photo Caption]
SK chemicals said on October 14 that Initz, its joint venture with Japan’s Teijin, signed an agreement with A. Schulman to supply super engineering plastic PPS. At the signing ceremony, A. Schulman executive vice president Bernard Rzepka (4th from the left), SK chemicals’ CEO Kim Cheol (5th from the left), SK chemicals division head Park Chan-jung (6th from the left), and Initz president Kim Hyo-kyung (7th from the left) are posing for photos.