Kumho Petrochemical advances SR expansion

SEOUL, South Korea—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 60,000-metric-ton project to produce solution styrene butadiene rubber at the group's Yeosu manufacturing plant, KKPC said in its third quarter presentation.

The project will double Kumho Petrochemical's SSBR capacity to 123,000 metric tons and was launched last year as part of the strategy to become "Asia's No. 1 SSBR player," the company said Nov. 4.

In addition, KKPC will implement two upgrade projects to increase capacity for styrene butadiene rubber and high-cis butadiene rubber (HBR) by 7,000 metric tons each by the end of the fourth quarter.

The Seoul-based supplier currently manufactures 256,000 metric tons of SBR and 155,000 of HBR.

Another upgrade will see the production capacity for nitrile rubber increase by 5,000 metric tons from the existing 92,000, by the end of the year, according to 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 will be carried out.

Kumho also indicated that an earlier 70,000-metric-ton expansion project for nitrile butadiene latex had been completed, bringing the group's total production capacity to 710,000.

Another ongoing project will see NB latex capacity raised by 236,000 metric tons by the end of 2023, according to the quarterly presentation.

During the third quarter of 2022, KKPC synthetic rubber sales came in at $503.7 million (KRW 656 billion), down 15 percent on last year.

Segment operating profit fell 62 percent to $64.5 million 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 vulcanizates, on the other hand, reported a strong quarter with both sales and earnings up year-on-year.

Segment sales rose 20 percent year-on-year at $150.5 million, while earnings increased 70 percent to $39.2 million, 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.

Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

Please enter a valid email address.

Please enter your email address.

Please verify captcha.

Please select at least one newsletter to subscribe.

View the discussion thread.