South Korea’s Lotte Chemical Corp. is diversifying into electric vehicle raw materials and hydrogen businesses as new growth drivers, moving away from its mainstay petrochemicals.
Lotte Chemical said on May 20 that it is spending 210 billion won ($185 million) to build facilities for ethylene carbonate (EC) and dimethyl carbonate (DMC), two organic compounds used in electrolytes, a key material for EV batteries.
The construction of the facilities will be completed in the second half of 2023, the company said after its board meeting.
Lotte Chemical has so far imported the two organic compounds, which account for about 30% of electrolytes' manufacturing cost.
On Thursday, Lotte also said it has signed a deal with Air Liquide S.A., a French multinational company that supplies industrial gases and services to various industries, to jointly invest in building a hydrogen distribution network using hydrogen obtained as a byproduct of petrochemical processes at Lotte’s plants.
The two companies will cooperate in hydrogen liquefaction facilities, high-pressure hydrogen tanks and carbon dioxide capture technology.
Air Liquide is a global leader in the industrial gas business, designing and building more than 120 hydrogen charging stations around the world.
Through the agreement with Air Liquide, Lotte said its push into the hydrogen mobility market will gain further momentum.
Korea's big companies are entering the hydrogen business as a new growth driver. DEAL, PART OF LOTTE’S ESG MANAGEMENT
As part of the deal, Lotte plans to build a high-pressure hydrogen shipment center and hydrogen charging stations at its plants in Daesan and Ulsan.
“With this deal with Air Liquide, we will actively participate in Korea’s efforts to expand the hydrogen economy,” said Hwang Jin-gu, chief executive of Lotte Chemical's basic material business.
The hydrogen deal will also help Lotte strengthen its environmental, social and governance (ESG) management. Strengthening eco-friendly businesses is a hot topic for Lotte Chemical as the company releases a large amount of carbon when producing products.
A Lotte Chemical plant in Yeosu, Korea Korea’s major companies have been looking for merger and acquisition opportunities in the hydrogen and rechargeable battery materials sectors, which are growing rapidly in tandem with increasing sales of electric vehicles.
Early this year, Lotte Chemical declared it would actively look for an acquisition target in the area of raw materials used in future mobility, such as electric cars.
