Lotte Chemical selling Pakistan business to Lucky Core Industries

Lotte Chemical will sell off its Pakistan subsidiary to a local chemical company for 192.4 billion won ($156 million), in a bid to raise funds to focus on the advanced materials business.

Lotte Chemical CEO Kim Gyo-hyun talks at a press conference in May. [YONHAP]

Lotte Chemical will sell off its Pakistan subsidiary to a local chemical company for 192.4 billion won ($156 million), in a bid to raise funds to focus on the advanced materials business.

Karachi-based Lucky Core Industries will take over the Korean company's 75.01 percent stake in Lotte Chemical Pakistan, a company that mainly engages in the production of purified terephthalic acid (PTA), Lotte said in a regulatory filing on Monday.

A sales and purchase agreement (SPA) will be signed on Jan. 26.

PTA is a raw material used in the manufacture of polyester, other textiles and bottles.

The raised funds will be used "expand its higher-valued products such as polyester PET and polyethylene" and "enter in eco-friendly material business," Lotte said.

The material business includes Lotte Chemical's purchase of Iljin Materials, a deal scheduled to close at the end of February. Lotte has to pay 2.7 trillion won for 53.3 percent of the copper coil manufacturer.

Lotte Chemical halted its PTA facility at the Ulsan plant in July 2020, and has been producing purified isophthalic acid (PIA) there, a raw material in the production of PET. Lotte Chemical is the world’s largest PIA producer, with 520,000 tons of annual capacity.

“The latest sell-off is our part of efforts to adjust the business portfolio to realize our visions for 2030,” said Hwang Jin-koo, president of Lotte Chemical’s basic material business.

Lotte Chemical CEO Kim Gyo-hyun announced last year that the company is targeting annual revenue of 50 trillion won in 2030, of which 60 percent come from high-added value and eco-friendly material businesses.

BY SARAH CHEA [chea.sarah@joongang.co.kr]