South Korean additives maker Songwon Industrial Co. Ltd. plans to continue its aggressive push into global markets by building a $20 million isobutylene plant.
The firm, which currently ranks third in the world in its specialized market of antioxidant additives and other stabilizers, said the new facility in Maeam, South Korea, will cut the cost of its raw materials.
Chairman Jongho Park announced the investment Oct. 29 at K 2007 in Dusseldorf.
The 60 million-pound-per-year facility is slated to start production in early 2009. It comes on the heels of a $120 million investment by Ulsan, South Korea-based Songwon in an antioxidant plant in Maeam that opened in April.
Park said the publicly traded firm has a target of quadrupling sales to $1 billion by 2012, both from gaining market share and by introducing new grades of flame retardants and other additives.
The new isobutylene facility will let the company cut costs 15-20 percent for the chemical, which is a raw material for several grades of its products, he said. Rapid fluctuations in oil prices have made prices for isobutylene volatile, the firm said.
The company said the plant will be the first commercial-scale facility for making isobutylene from cracking tertiary butanol in a process developed by the firm.
Songwon said it has 7 percent of the world market in its products, trailing market leader Ciba Specialty Chemical Inc. of Basel, Switzerland, which has 48 percent, and Middlebury, Conn.-based Chemtura Corp., with 20 percent. Park said the company wants to be a ``co-market leader'' with Ciba.
While it's making an aggressive push, the company's financial results weakened in 2006, as it went from profit of $9.4 million in 2005 to a loss of $11.5 million, on sales of about $246 million. The firm attributed the decline to faster depreciation of its investments, rather than any market change.
Songwon also announced a cooperative agreement with W. Zink GmbH of Jettingen-Scheppach, Germany, to provide ``one-pack systems'' of additives to Europe.
The Korean firm said it may set up a major production facility for one-pack systems in 2008. Maurizio Butti, chief executive officer of subsidiary Songwon International AG of Frauenfeld, Switzerland, said the company still is deciding what form that investment might take. One possibility is a joint venture with W. Zink.
At K, Songwon also introduced several products, including in its Songnox line: Songnox 2500 hydroquinone-based antioxidant for medical adhesives, 4425 antioxidant for organic polymers, 6180 antioxidant for films and 3600 ultraviolet absorber.