South Korean Chemical Industry

The South Korean chemical industry generated sales of around USD 152.4 billion in the year 2013. There are around 3,429 chemical companies in the country. South Korea is a cost-effective manufacturer of upstream petrochemical products. South Korea has the 7th largest global organic chemical export market. The country’s shipments of organic chemicals accounted for USD 22.7 billion in the year 2017. The exports were around 26.5% higher than the previous year. The organic chemical exports accounted for 4% of Korea’s total exports. The country exports nearly 25% of its output to China. South Korea’s overall crude oil and refinery feedstock imports from the Middle East and the United States fell 9% in 2020. The South Korean chemical sector is now focussing on the production of specialty and high value-added products for the automotive and electronic industry. 
Commodity chemicals refer to the group of chemicals that are manufactured in abundance. Various subsegments of commodity chemicals include polymers, plastics, petrochemicals, and industrial gases. The petrochemical industry has dominated the Korean chemical market. This segment contributes nearly 70% to the country’s total chemical revenue. South Korea has access to many high-end markets that consume the petrochemical product, including the automotive, packaging, and consumer goods sectors. 
Over the past few years, the Korean government has started investing in research and development in the green, fine and sustainable chemical sector. Korea is on the path to becoming the chemical industry hub of Asia. 
Several multinational companies have set up their manufacturing plants and offices in the country. Korea has received more than USD 8 billion in foreign direct investment (FDI) over the last ten years. However, the export of petrochemical products is likely to decrease over the coming years. The expanded production in China and decreasing demand in Asia are the major reasons for the low export. 
Leading chemical companies 
Seoul is home to the country’s leading chemical companies. LG Chem is the largest chemical company by revenue in Korea, headquartered in Seoul. In the year 2019, the company generated sales of USD 12.87 billion. They have improved their global position as a material supplier. LG Chem manufactures a wide range of products, including EV battery cells, polarizers, and ABS. ABS is a highly-functional plastic known for its strong impact and heat resistance. ABS finds applications in various areas like automobiles, IT devices, etc. LG Chem also produces a wide range of plastics including polyvinyl chloride, acrylates, etc. 
SK Global Chemicals is the largest commodity chemicals manufacturing company in South Korea. SK Global Chemicals is growing into a technology-based company through continuous research and development effort as well as global expansion. The company established the first Korean naphtha cracking facility. This led to the development of the country’s petrochemical industry. SK Global Chemicals is headquartered in Seoul and employs around 1,012 people. The company generated total sales of around USD 10.2 billion in the year 2019. SK Global produces a variety of chemicals including adhesives, commodity chemicals, 3D printing material, co-polyester, etc. The commodity chemicals manufactured by Lotte Chemical include TL, Mx, BZ, etc.
Hanwa Chemical has been the backbone of Korea’s petrochemical sector. The company is involved in the production of basic petrochemicals, advanced materials, synthetic resin, etc. Hanwa Chemical manufactures low-density polyethylene, low linear density polyethylene, and chlor- alkali. These chemical products find application in various industries. 
As per a survey by the American Chemical Society, Korean companies including LG Chem, SK Global Chemical, Lotte Chemical, and Hanwha Chemical ranked among the global top 50 chemical manufacturing companies. 
BASF, one of the world’s largest chemical company shifted its material headquarters to Seoul. They also established a research and development center in South Korea. Dow chemicals set up their plant in Korea to produce quantum dot materials in abundance. 
Future opportunities
The chemical industry in the country has a promising future. The Korean chemical industry offers an attractive market for many foreign chemical companies. The country has expanded the production of specialty and fine chemicals. South Korea has the scope to diversify the production of high-value engineering plastics. The sustained investment by foreign chemical companies in the form of foreign direct investment demonstrates the potential of Korea’s chemical industry.

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