Sector News

Korea approves Hanwha-Samsung deal subject to EVA pricing conditions

March 9, 2015
Chemical Value Chain
The Korean government has approved the Hanwha Group’s 1.6 trillion South Korean won ($1.45 billion) acquisition of Samsung General Chemicals, subject to certain pricing conditions. Hanwha has acquired a total of 81% of Samsung General Chemical, together with its affiliate Samsung Total Petrochemicals, including a 27.6% stake owned by Hanwha Chemical and 30% stake owned by Hanwha Energy. The deal makes Hanwa the largest Korean petrochemical company.
 
The Korea Fair Trade Commission (Seoul) , in approving the deal, said that the market for four polyethylene products – low-density polyethylene, linear low-density polyethylene, high-density polyethylene and ethylene-vinyl acetate (EVA) – would be impacted by the merger. It said that no remedies were needed in respect of the first three products, where the new group’s market share was less than 35%, but the combined entity would have a domestic market share of 68% in EVA. The market share in high-quality EVA products for solar film and lamination would be even higher; Hanwa and Samsung control 90% and 87% of this market, respectively. Imports of EVA are insufficient to challenge the enlarged Hanwha’s dominant market position as they account for only 10% of the Korean market, according to the commission. The merger will reduce the number of participants in the EVA market from four to three – Hanwha itself and Lotte Chemical and LG Chem, with 25% and 13% market shares, respectively, as of end-2013. 
 
The commission has accordingly ordered the enlarged Hanwha Group to limit for the next three years the rate of domestic EVA price increases to below the price increases on EVA exports, in the event that EVA prices increase on the world market. In the event that prices decline, Hanwha will have to reduce domestic EVA prices by a greater amount than the international price decline. The company will have to report price developments in the EVA market every six months to the commission.  
 
Hanwha says that 70-80% of the EVA it produces in Korea goes for export. In 2013, it produced 360,000 m.t. of EVA and sold only 100,000 m.t. of it in the domestic market.
 
By Natasha Alperowicz
 

Join the discussion!

Your email address will not be published. Required fields are marked *

Related News

November 22, 2020

JM and Dow’s joint technology wins Best Process award at ICIS Innovation Awards

Chemical Value Chain

Johnson Matthey (JM) and Dow Global Technologies (Dow) are winners of the Best Process award for this year’s ICIS Innovation Awards for our joint LP OXOSM process to produce Isononyl Alcohol (INA).

November 22, 2020

What do EU citizens think about nanomaterials?

Chemical Value Chain

Survey shows that citizens demand better labelling of everyday products containing nanomaterials and increased awareness of the risks and benefits of products containing nanomaterials.

November 22, 2020

New green materials could power smart devices using ambient light

Chemical Value Chain

Researchers have developed environmentally friendly materials that could harvest enough energy from indoor light to power wireless smart devices.

Send this to a friend