South Korea’s Hanwha Chemical Corp. said Tuesday that it will add chlorinated polyvinyl chloride (CPVC) manufacturing lines in its Ulsan Plant in a bid to improve profitability by entering the premium PVC market that has been steadily growing.

The company is one of the nation’s two leading polyvinyl chloride (PVC) - widely used plastic in various industries and in households - manufacturers, but demand for PVC worldwide has been on the decrease, making them look for opportunities in other markets such as CPVC. CPVC is chlorinated PVC that can better withstand heat, pressure and corrosion and mainly used in industrial pipes. Its annual domestic demand stands at around 9,000 tons, but there is no manufacturer in Korea.

Once the construction of the new production line is completed later this year, the company is expected to churn out about 30,000 tons of CPVC annually.

With the new facility, Hanwha Chemical expects to create a niche market, citing consistent demand for CPVC and boost profitability thanks to the high price of CPVC - more than double the price of PVC products.

The conglomerate pins hopes on its new business for a breakthrough amid falling PVC demand and intensifying competition from Chinese rivals with cheaper products.

Local PVC consumption fell below 900,000 tons in 2011 for the first time, and it slid to 880,000 tons last year, with the price falling to 1 million won ($860) per ton. Combined PVC output of Hanhwa Chemical and LG Chem is over 1.2 million tons and the global demand for PVC has been on a downward trend, making PVC production less profitable. Demand for CPVC, on the other hand, is gradually growing at an annual 10 percent rate on average. As of 2015, the global CPVC market reached 250,000 tons in volume.

By Chung Wook

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]