LG Chem scraps plan to build $4.2bn petrochemical complex in Kazakhstan
South Korea based chemical company, LG Chem has scrapped its plan to build $4.2bn petrochemical complex in Kazakhstan due to plunging oil prices.
In 2011, the firm agreed to form a 50-50 joint venture with the Kazakhstan Government-owned UCC and a private company SAT for the construction of the complex near the western Kazakh city of Atyrau.
The joint venture intended to build ethylene and polyethylene plants with annual capacities of 840,000 tonnes and 800,000 tonnes, respectively.
The Korea Times cited the company as saying in a statement: "The Kazakhstan project lost its luster because of a steep increase in facility investment amid growing uncertainty.
"On a business front, LG's top management reached a consensus that it wasn't promising."Additionally, LG Chem also scrapped its plan to invest in polysilicon, which is used to manufacture solar cells, due to the worsening market situation.
The project, which was initially announced in 2011, involved development of a 5,000-tonne-per-year plant with an investment of $408m to manufacture polysilicon, reported Reuters.
LG Chem public relations office head Song said: "LG Chem has no option but to invest in businesses that are more promising and have growth potential."
Song added that exist from the projects will save money. This money will be used by the firm to strengthen its electric vehicle batteries, filters and agricultural chemicals which the company considers as new revenue streams.