MORRISTOWN, N.J. — AlliedSignal Inc. boosted its stake in South Korean plastics markets by acquiring the 50 percent interest in LG Allied Signal Corp. formerly held by partner LG Chemical Ltd. of Seoul.
The operation, renamed AlliedSignal Korea Plastics, compounds Capron nylon 6 and Petra post-consumer PET resins in Seoul. The joint venture was formed in 1989.
AlliedSignal spokesman Tad Yogo said the purchase became effective Sept. 28 when the South Korean government approved it. LG Chemical wants to focus on fewer businesses, AlliedSignal said in a news release. LG Chemical is a diverse petrochemicals and plastics producer and also has businesses in building materials, household goods and specialty chemicals.
Yogo said in a telephone interview from AlliedSignal's Morristown headquarters that LG Chemical decided to exit the joint venture because the company does not produce raw materials for nylon. He said the partners discussed dissolving the venture well before Korea's economic crisis. LG Chemical began its restructuring in 1996. Yogo conceded that market conditions in South Korea are difficult, and cited as an example a 50 percent drop in auto production, a major market for AlliedSignal Korea. Electrical companies are also key customers for the compounder.