Kumho Petrochemical to invest $4.5 billion in future growth plan

SEOUL—Kumho Petrochemical Co. Ltd. has announced a major investment initiative which will see the South Korean group pumping $4.5 billion (KRW 6 trillion) into existing and new businesses over the next five years.

As part of the initiative, Kumho will invest about $2.5 billion (KRW 3.3 trillion) in its "core" business areas, which includes nitrile butadiene latex production and styrene solution butadiene rubber manufacturing.

The group aims to expand NB latex production, a key material for rubber gloves, in order to maintain its "top global position," said the Seoul-based supplier in a recent statement.

"As the global hygiene concept is continuously strengthened, latex gloves are expected to become a representative medical and hygiene product along with masks," Kumho said.

The group said the investment will fill a "gap in the technology and production capacity" of the material.

Furthermore, the initiative will involve investments within Kumho's SSBR operations as it targets the No. 1 position in Asia.

In addition to SSBR capabilities, Kumho said it also would invest in its "fine chemical products" such as synthetic rubber antioxidants and vulcanization accelerators.

"We are discussing detailed strategies to strengthen global competitiveness, and are devising strategies to maximize profitability," it added.

The company did not provide further details for the planned investments, but the announcement comes after a series of expansion projects introduced last year.

In June last year, Kumho unveiled an "aggressive $225 million investment" in a new nitrile rubber latex plant at its Ulsan petrochemical complex.

Later in the year, the group announced that it would "more than double" its SSBR production capacity from 63,000 metric tons per annum (63 ktpa) to 123 ktpa by the end of 2022.

The Korean supplier also is considering a $2 billion (KRW 2.7 trillion) investment in environmental, social and governance (ESG) management as well as "future growth engines," including the electric vehicle sector, biomaterials and eco-friendly materials, the company said.

"The main objective of the group's focus on ESG is to facilitate its transition toward renewable energy and to ensure greater efficiency with regard to the energy generation business," Kumho said, adding the group plans to reduce greenhouse gas emissions by over 29 percent by 2030.

As for its future growth plans, the company is "nurturing businesses with large potential," such as carbon nanotubes for secondary battery materials and engineering plastics to lighten the chassis of EVs.

It also plans to respond to the rapidly changing industry trends by promoting digitalization across its operations.

"The company's ultimate goal is to prepare for a sustainable future by developing specialty products to help maintain its overall functionality while also adding eco-friendly features into its specifications," the company said.

Rubber News staff contributed to this report.