OCI Holdings to invest $739 mn to expand business in Malaysia

[Courtesy of OCI]

OCI Holdings Co., a chemical business operator in South Korea, plans to invest 1 trillion won ($739 million) to expand business in Malaysia by enhancing production capacity for polysilicon, chlor alkali (CA), and epichlorohydrin (ECH).

According to multiple industry sources on Tuesday, OCI plans to sign a joint venture agreement with Japan’s Tokuyama Corp. as early as in November and establish a joint venture in Malaysia early next year.

The joint venture will be responsible for producing 11,000 tons of polysilicon for chips starting in the first half of 2026. The plant will be built on a site owned by OCI Malaysia (OCIM) located inside the Samalaju Industrial Park in Sarawak, Malaysia.

OCIM is a wholly owned subsidiary of OCI Holdings, which owns 33.25 percent stake.

OCIM plans to double its capacity by increasing the annual production output of its solar panel polysilicon to 65,000 tons by 2027 from the current 35,000 tons. Its CA process will be increased to 100,000 tons in capacity per year.

OCI Kumho Sdn Bhd, a joint venture founded by OCIM and Kumho P&B Chemicals Inc., aims to produce 100,000 tons of ECH in the Samalaju plant from 2024.

OCI Holdings said more than 1 trillion won will be invested in the expansion over the next five years, which includes factory buildups and maintenance.

In addition to the large-scale investments, OCIM has focused on improving environmental, social, and governance (ESG) performance to solidify its growth in Malaysia.

The company recently launched a new ESG unit with a plan for recruiting local staff there.

On the back of such massive investments, OCIM has solidified its status as a key subsidiary of OCI Holdings.

OCIM achieved 721.1 billion won in sales and 332.7 billion in operating profit in the third quarter of this year. The figures account for 40 percent of OCI Holdings’ entire sales and 60 percent of operating profit.

“Electricity bills account for about 40 percent of the costs necessary for polysilicon manufacturing, and Malaysia has an edge as it offers cheaper industrial electricity price,” said an official from OCI Holdings.