Kumho Petrochemical advances synthetic rubber expansion programme

Seoul – Korea Kumho Petrochemical Co. (KKPC) is on schedule to deliver a series of synthetic rubber expansions at its production facilities in South Korea by the yearend.

These include a 60 kilotonne-per-annum (ktpa) project to produce solution styrene butadiene rubber (SSBR) at the group’s Yeosu manufacturing plant, said KKPC in its third quarter presentation.

The project will double Kumho Petrochemical’s SSBR capacity to 123ktpa and was launched last year as part of the strategy to become ‘Asia’s number 1 SSBR player,’ the company noted 4 Nov.

In addition, KKPC will implement two upgrade projects to increase capacity for styrene butadiene rubber (SBR) and high-cis butadiene rubber (HBR) by 7ktpa each by the end of the fourth quarter.

The Seoul-based supplier currently manufactures 256ktpa of SBR and 155ktpa of HBR.

Another upgrade will see the production capacity for nitrile rubber increase by 5ktpa, from the existing 92ktpa, by the end of the year, said the presentation.

KKPC manufactures synthetic rubber materials at two factories in Ulsan and Yeosu in South Korea. The release did not specify where the upgrades are being carried out.

Kumho also indicated that an earlier 70ktpa expansion project for nitrile butadiene latex had been completed, bringing the group’s total production capacity to 710ktpa.

Another ongoing project will see NB latex capacity raised by 236ktpa by the end of 2023, according to the quarterly presentation.

During the third quarter of 2022, KKPC synthetic rubber sales came in at KRW656 billion (€475 million), down 15% on last year.

Segment operating profit fell 62% to KRW84 billion during the quarter, due mainly to sluggish demand and the global economic downturn.

KKPC also linked the lower earnings to reduced latex sales volume as major gloves makers cut production.

For the fourth quarter, Kumho said it expected butadiene market prices to decrease due to weak demand from downstream industries.

However, the group expects profitability to decline further due to “continued sluggish demand and regular maintenance,” and anticipated declines in NB latex demand and market prices.

Kumho’s elastomers unit, which produces EPDM and thermoplastic vulcanisates, on the other hand reported a strong quarter, with both sales and earnings up year-on-year.

Segment sales rose 20% year-on-year at KRW196 billion, while earnings increased 70% to KRW51 billion, helped by “solid demand from downstream industries.”

Fourth quarter profitability, however, is expected to decrease slightly compared to the previous quarter due to weak year-end demand.