Versalis, Lotte to build new plant under elastomers technology deal

San Donato, Italy – Versalis and Lotte Chemical have extended an elastomers co-operation deal with a technology license agreement and plans to build a new facility in South Korea.

The move, announced 1 April, is focused on styrene-isoprene-styrene and styrene-butadiene-styrene (SIS/SBS) materials, particularly for the hot-melt adhesives market as well as technical and sports goods, bitumen and plastics modifiers.

The SIS/SBS license agreement marks the consolidation of a partnership started off in 2012 when Versalis and Lotte launched the development of elastomers productions with Versalis technologies in Yeosu, South Korea. This led to the establishment in October 2013 of the Lotte Versalis Elastomers  joint venture.

The 50:50 JV will use Versalis SIS/SBS proprietary technology for a 50-kilotonnes-per-annum (ktpa) plant to be constructed at Lotte Chemical’s Yeosu site in South Korea.

The cooperation has a strategic value enabling both partners’ aim to seize the opportunity to strengthen and enlarge the scope of their alliance onto premium market segments with a rapidly escalating demand in the Asian region.

In addition to the right to use proprietary SIS/SBS process and engineering services, already completed, Versalis said it will provide the Korean petrochemicals company with commercial support and technical assistance.

Lotte Chemical will handle the vertical integration with its new isoprene unit, to be completed within the second half of 2016. it will also provide the Yeosu plant operations, maintenance services and existing infrastructures, including logistics.

The SIS-SBS plant start-up is scheduled for early 2018 and will be connected to the new isoprene plant and the butadiene unit, which is already up and running at Yeosu, for feedstock.

This new capacity will add up to the styrene-butadiene and ethylene-propylene-derivatives unit under a 2012 master agreement thus contributing to total about 250 ktpa of elastomers, said a joint press release.

The SIS/SBS license agreement shows that “sharing the same vision” brings opportunities for growth and value to both parties, according to Versalis’ CEO, Daniele Ferrari .

“In times when market scenarios evolve so rapidly and unpredictably, joining forces is the best way to improve competitiveness, especially in the elastomers business where a proper international presence is fundamental to keep the leading position on the marketplace,” said Ferrari.

The license agreement ”will be a good chance to make secure sustained growth and global competitiveness in the rapidly changing world situation.” added Soo Young Huh, CEO of Lotte Chemical.