HC Petrochem, a joint venture between Hyundai Oilbank Co. and Japan’s Cosmo Oil Co., began work on a new plant that will triple its production capacity, the company said on Sunday.

The work got under way Friday in a ceremony attended by Hyundai Oilbank CEO Kwon Oh-gap and Cosmo Oil chief Kimura Yaichi.

The 600 billion won ($568 million) plant, located within the company’s facility in Daesan, South Chungcheong Province, is the company’s second BTX complex, which produces benzene, toluene and paraxylene.

Benzene is a compound used to raise octane levels in fuel and synthetic detergents and is a basic ingredient in a large number of chemical products. Paraxylene is a raw material required for producing a range of products including plastics and polyester fabrics.

The new facility is scheduled for completion in June 2013, and will add 1 million metric tons to HC Petrochem’s annual production capacity.

“The company’s business structure will be strengthened further once the project is successfully completed as the company will have the country’s most advanced refining facilities, and facilities for producing high-added value petrochemical products,” Hyundai Oilbank chief executive Kwon Oh-gap said.

“By exporting all of the new BTX complex’s output, it will also provide an opportunity to improve the country’s competitiveness.”

Hyundai Oilbank’s existing facilities produces 380,000 tons of paraxylene and 120,000 tons of benzene on an annual basis.

The company said that all of the benzene and paraxylene produced by the new plant will be exported to China, Europe and other markets, which will push up its exports by an estimated 1 trillion won.

Hyundai Oilbank added that as HC Petrochem’s new facility will mainly use mixed xylene produced by Cosmo Oil, its operations are unlikely to be significantly affected by fluctuating raw materials prices.

Hyundai Oilbank and Cosmo Oil established HC Petrochem in 2009.

By Choi He-suk  (cheesuk@heraldcorp.com)