Seoul – Kumho Petrochemical is more than doubling its production capacity for solution styrene butadiene rubber (SSBR) in a bid to become ‘Asia’s number 1 SSBR player.’
The materials supplier is aiming to increase its production capacity from 63 kilotonnes per annum (ktpa) to 123ktpa by the end of 2022 at its manufacturing site in Yeosu, South Korea, said Kumho Petrochemical in a press release in August.
The move is part of the group's recent strategic growth plan, unveiled in March, which will see the supplier make “intensive investment in high-margin solid rubber.”
The plan, through to 2025, aims to see Kumho Petrochemical maintaining its current leading position in NB latex, which was achieved through ‘aggressive capacity addition’.
Furthermore, it envisions Kumho Petrochemical becoming Asia’s number 1 position for SSBR through continued investments in the shift from general rubber to high value-added products.
The company will also consider merger and acquisition activities to lift the its rubber portfolio, as ‘recent headwinds in the rubber market’ has led to increased M&A activities among key players.
According to Kumho Petrochemical, “excessive competition” driven by oversupply since 2011 has led to a fall in the unit price of general purpose rubber products and a “rapid decline” in the profitability its core rubber business.
However, over the course of the past decade, the Korean group said it successfully improved business fundamentals by “preemptively shifting to high value added products [and] responding to deteriorating market conditions for commodity rubber products.”