Dow Chemical Co. is launching a joint venture with LG Chemical Ltd. to build a major polycarbonate plant in Yochon, South Korea.
The venture will give Midland, Mich.-based Dow its first PC manufacturing presence in the Asia-Pacific region. Dow already operates a joint venture plant in Nihama, Japan, with Sumitomo Chemical Co.; however, that plant serves only the Japanese market.
Dick Sosville, vice president of Dow's engineering plastics unit, said the company is confident Asia is ``the right place to invest,'' in spite of recent economic woes plaguing the region.
``We have a lot of confidence in Asia, long-term, that the economy there will recover and return to its good growth pattern,'' Sosville said in an Oct. 14 telephone interview from Midland.
Sosville added that PC in particular has not been affected by the region's economic crisis in the same way that large-volume thermoplastics have. Asian PC consumption actually has increased this year, thanks to its use in such items as compact discs, water bottles and sheet products.
Long-term PC use in Asia should exceed global growth predictions of 7-10 percent annually, according to Sosville.
The new venture, to be called LG Dow Polycarbonate Ltd., is ``an ideal bridge'' between LG and Dow, LG Chairman Bon-Moo Koo said in a news release.
``LG has competed in the engineered plastics business for a long time without the benefit of our own source for this key resin,'' Koo said. ``Working with Dow ... in this venture will greatly enhance our opportunities for polycarbonate resins throughout the Asia-Pacific region.''
To date, LG has been a major PC compounder in the region. Construction of the new plant is expected to cost about $300 million, LG officials said. Officials were unsure how many jobs the plant would create.
Dow's engineering plastics unit has been busy lately. News of the LG joint venture comes less than a month after Dow announced a partnership to distribute and compound nylon resin made by Solutia Inc. of St. Louis.
Sosville said both deals are ``very strategic parts'' of the company's overall engineering resins strategy.
``Our direction is to be a full engineering plastics player around the globe,'' he said. ``To do that, more and more you have to provide from local sourcing. That's what a lot of customers expect.''
Dow currently makes almost 500 million pounds of PC annually at plants in Freeport, Texas; Stade, Germany; and Nihama.