By: Steve Toloken
February 4, 2013
ULSAN, SOUTH KOREA -- Japan's Teijin Chemicals Ltd. said Feb. 4 it is investing in a joint venture with South Korea's SK Chemicals to make more environmentally friendly polyphenyline sulfide materials aimed at Asia's growing electric vehicle and electronics industries.
The joint venture, to be owned 66 percent by SK, will use the Korean company's technology to produce PPS resins and compounds without chlorine or sodium, which the companies said is both better for the environment and less corrosive on molds and metal parts than traditional PPS.
The companies plan to build a new 12,000 metric ton PPS plant in Ulsan, South Korea, to open in 2015, with annual capacity potentially increasing to 20,000 metric tons as demand grows, Teijin said in a statement.
The facility was first disclosed by Pangyo, South Korea-based SK Chemicals in December but it did not mention at that time any investment by Teijin or other companies. SK said it would invest 230 billion Korean won ($211 million).
Teijin and SK said they believe they can capture 20 percent of the global PPS market by 2020, and have annual sales of 350 billion won ($320 million) by 2024.
"The joint venture will pursue global markets, with a special focus on the fast-growing Asian region, aiming to become a world leader in PPS resin and compounds," Teijin said. "The demand for PPS resin is expected to grow in line with the increasing popularity of electric and hybrid vehicles and the ongoing expansion of electronics markets in emerging countries."
The two companies said the chlorine-free grades of PPS can have environmental and performance advantages.
They said the chlorine and sodium in traditional PPS resin comes from both raw materials and byproducts, and remain in the resin where they can corrode molds and lead to deterioration of metal parts. PPS is often used in electrical components, connectors and sockets.
SK said its "green" production process will give it marketplace advantages.
"SK Chemicals' PPS is different from the production process built by existing businesses and does not require poisonous solvents," it said. "The PPS thus produced does not contain any chlorine unlike existing materials, which is a differentiating point."
The companies said chlorine can have a potentially harmful environmental impact if burned and noted pressure in North America and Europe to find alternatives.
"SK Chemicals plans to actively attack the PPS market based on such eco-friendliness," the company said. "The electric and electronic industries worldwide have begun to enforce strict regulations to control and inhibit the amounts of chlorine used on their products."
Independent of environmental claims, SK also noted general growth in PPS markets.
Greater use of PPS in making cars lighter and in the precision components specifically needed for electric and hybrid cars is expected to increase demand in the vehicle industry from 50,000 metric tons in 2011 to 100,000 tons in 2019, SK said.
The global market for PPS is expected to grow 7 percent a year through 2020, it said. It said the global market for PPS in 2012 was 94,000 metric tons.
A Teijin spokesperson said the two companies have been talking for about a year, well before SK first announced the Ulsan facility, but the Japanese company's investment was not finalized until now.