LG Chem and CNOOC to invest US$370 mln in ABS plant in China

22-Jul-09

LG Chem posted a record quarterly profit because of increased exports to China. In a bid to draw on demand from China, LG Chem Ltd. and CNOOC Ltd. plan to invest US$370 mln to build an acrylonitrile butadiene styrene (ABS) plant in South China. The South Korean major and the Chinese company will each hold 50% stake in the project. Production at the 150,000 tpa unit is slated to commence in 2011. Capacity is planned to be doubled by 2013. LG Chem is aiming for sales of $300 million by 2012 and $600 million by 2014 from the joint venture. As part of its stimulus package to help bolster economic growth, China has allocated 20 billion yuan (US$2.9 bln) worth subsidies this year for rural residents’ purchases of home appliances including televisions and refrigerators, As a result, sales of home appliances under the rural subsidy program rose 42% in May as compared to previous month.