LG Chem And TK Chemical Sign PBAT Cooperation MOU

On September 10, LG Chem and TK Chemical, a subsidiary of SM Group, signed an MOU in Seoul on the development of eco-friendly biodegradable materials (PBAT) and business cooperation.

PBAT (Polybutylene Adipate-co-Terephthalate) is a petroleum-based synthetic plastic that rapidly decomposes through reactions with oxygen, heat, light, and enzymes in the environment. It is an eco-friendly material that achieves natural decomposition within six months when buried underground. PBAT is suitable for various applications, including agricultural plastics and disposable bags.

TK Chemical is a South Korean synthetic fiber materials company specializing in the production of PET polyester, PET chips, and spandex. Its core PET business leads the Korean market with differentiated quality. The two companies will sign a formal contract within the year, aiming to construct a PBAT production line and commence product manufacturing in South Korea in the second half of 2022. Specific details such as production capacity are undisclosed per the agreement. TK Chemical plans to build the PBAT production line leveraging its proven expertise in stable PET polyester facility operations.

This business partnership was driven by the alignment of strategic interests between LG Chem, which is comprehensively restructuring its business portfolio with a focus on eco-friendly materials, and TK Chemical, which seeks to establish new growth engines beyond its existing PET polyester-centric operations. Through this collaboration, LG Chem aims to expand its eco-friendly product portfolio and accelerate the commercialization of PBAT products via strategic investment, thereby securing an early-mover advantage in the market.

Previously, LG Chem announced last month that its Daesan plant would complete the construction of a PBAT facility with an annual capacity of 50,000 tons within the year, and begin mass production in 2024.

In addition, the two companies plan to establish a mass production system for eco-friendly biodegradable materials, including the marine-biodegradable material (PBSAT) currently under development, and will explore various collaboration options for their overall eco-friendly materials business.

Noh Guk-rae, Head of LG Chem’s Petrochemicals Business Unit, stated, “Our collaboration with TK Chemical will provide us with differentiated competitiveness in the biodegradable plastics market. Moving forward, we will pursue comprehensive partnerships with multiple companies in the sustainability sector to continuously optimize our eco-friendly product portfolio.”

Kim Byung-ki, CEO of TK Chemical, stated, “We will strive to join LG Chem, a leader in eco-friendly materials, in practicing ESG management—a current trend shaping the global economic order—thereby enhancing our corporate social value through environmental sustainability and contributing to the achievement of the government’s carbon neutrality goals.”

On the other hand, since 2019, TK Chemical has established a resource circulation system in Korea for recycling discarded PET bottles and other materials by signing business agreements with the Ministry of Environment, local governments, and various companies. Building on over 50 years of accumulated top-tier technology and extensive experience in the synthetic fiber sector, the company is committed to producing low-carbon, environmentally friendly products.