South Korea’s Lotte Chemical Corp. will invest 367.5 billion won ($3.2 million) to ramp up its meta-xylene and polycarbonate production capacity to keep up with fast-growing demand for the chemicals used in making plastic bottles and automotive parts.

Lotte Chemical said that during a board meeting held on Wednesday, it decided to invest 367.5 billion won to expand its annual meta-xylene production capacity at Ulsan facility on the southeastern coast to 360,000 tons from 160,000 tons, and that of polycarbonate at Yeosu plant on the southern coast to 210,000 tons from 100,000 tons. The company aims to complete expansion by the end of 2019.

The meta-xylene is a raw material for high-purity isophthalic acid (PIA) that is used for producing plastic bottles, paints and adhesives. Polycarbonate is high impact and thermal resistant plastic that is used in automotive lamps, electric sockets and medical syringes.

The company’s decision to up its meta-xylene production comes after global demand for PIA has recently jumped. The company is already the world’s largest PIA producer with its annual production capacity reaching 400,000 tons, but its current operation rate has remained at around 70 percent due to a shortage of meta-xylene. The company expects that once the facility expansion is completed, it would no longer have to import meta-xylene from overseas and its PIA factory operation rate will go up.

Demand for polycarbonate has been on a rise recently amid automotive market’s shift to lighter-weight cars, leading Lotte Chemical to decide to beef up its polycarbonate output. The company expects it would become the world’s third largest polycarbonate producer with a combined annual production capacity of 450,000 tons after adding the new lines.

Separately, the chemical producer will complete constructing a synthetic rubber plant by June this year. It has been building the plant in Yeosu to manufacture elastomers for tire and automotive industries with Italy-based Versalis S.p.A. under a joint partnership. Also, its Malaysian subsidiary Lotte Chemical Titan aims to finish expanding naphtha cracking facility within the second half of this year.

By Jung Wook

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