LG Chem said Wednesday it had finished expansion work on production lines for acrylic acid and a super absorbent polymer -- two basic materials on which the company pins high hopes for market leadership.

Following the expansion, its production plant in Yeosu, South Jeolla Province, has an annual production capacity of 510,000 tons of acrylic acid and 360,000 tons of SAP, the world’s fifth- and fourth-largest capacities, respectively.

The company predicted an additional 300 billion won ($250 million) in sales through the new investment. 

Distillation of crude oil results in the production of naphtha, which is further cracked in the absence of oxygen to give ethylene and propylene. Acrylic acid and SAP are derivatives of propylene. This entire process is carried out at LG Chem’s plant. 

The chemical unit of LG Group is the sole producer of acrylic acid in Korea. The company started the production in 2004 on its own technologies and now competes head-on with global companies like BASF, Dow and NSCL.

As part of the efforts to secure competitiveness in basic materials, the company has also poured resources into the SAP business since 2008, becoming the No. 4 player in the market.

Buoyed by increased production capacity and improved productivity, LG Chem said it aims to elevate sales of acrylic acid and SAP from the current 1.1 trillion won to 1.7 trillion won by 2020.

“Since our entry into the acrylic acid and SAP business, LG Chem has become a global player in the field through large-scale investment and research and development efforts,” said LG Chem’s basic material business chief Sohn Ok-dong. “We will be ramping up our efforts to lead the market.”

According to the company, the market for acrylic acid is expected to grow from the current 4.9 million tons last year to 6.7 million tons by 2020, while that of SAP is estimated to increase from 2.3 million to 3.4 million in the next five years.

By Lee Ji-yoon (jylee@heraldcorp.com)