Lotte Chemical Corp.’s joint venture with Japan’s Tokuyama Corp. will ramp up specialty chemical production to accelerate its shift away from the basic chemical market flooded with cheaper Chinese products.
Hantok Chemicals Co., their 50:50 joint venture, signed an agreement on Thursday to build an ammonium salt plant in Pyeongtaek with the Gyeonggi Free Economic Zone Authority and Pyeongtaek City.
Hantok will pump 130 billion won ($88 million) into the facility and will break ground in the second half of 2025. It is scheduled for commercial production at the end of 2026.
A Lotte official said it is considering increasing its production capacity in the free economic zone, where it secured 32,000-square-meter land in the Thursday agreement.
Ammonium salt, or tetramethylammonium hydroxide (TMAH), is vital in the photolithography process of semiconductors and displays.
The advanced chemical is produced in South Korea, Japan, Taiwan and the US. Hantok controls 35% of the global TMAH market catering to semiconductor companies as the sector’s largest player.
Lotte Group is the world’s sole producer of both TMAH and its basic material, or tetramethyl ammonium chloride (TMAC). Lotte Fine Chemical Co. supplies TMAC to its affiliates.
The chemical-to-retail conglomerate has invested a total of 1 trillion won in eight specialty chemical plants in Korea. In comparison, its recent spending on domestic base chemical production lines amounted to 443.8 billion won.
The new facility construction comes as South Korea pledged to ease regulations and offer incentives for mergers and acquisitions of domestic petrochemical companies and plant shutdowns to survive the competition with Chinese peers.
By Woo-Sub Kim
duter@hankyung.com
Yeonhee Kim edited this article.
