Kartik Kohli 2024-11-08 08:30:25
Lotte Chemical Corp. and Ube Corp. have announced plans to liquidate their joint venture Lotte Ube Synthetic Rubber Bhd. (LUSR; Pasir Gudang, Malaysia). LUSR was established in 2012 by Lotte Chemical and Ube Elastomer Co. as a 50/50 JV, and it produces polybutadiene rubber (PBR), with a capacity of 72,000 metric tons per year.
Lotte Chemical said the liquidation of LUSR was a “bold” decision because it was judged to be a noncore business in line with Lotte Chemical’s strategic direction. Lotte Chemical CEO Lee Hun-ki said, “The liquidation of LUSR is part of the recovery of financial soundness and changes in the business portfolio,” and added, “we will continue to actively respond to the changing market in line with the direction of our management strategy.”
Ube Corp. expects a loss of ¥10.0 billion ($65.6 million) due to the JV’s liquidation.
Ube Corp. said that demand for butadiene rubber has been growing steadily, but in recent years, the market has been sluggish due to an expansion of production capacity that exceeds demand, mainly by Chinese manufacturers.
LUSR has limited customers, which forced it to focus on spot sales and hindered its ability to achieve the performance level initially expected, the partners said.
Ube Corp. said the company’s PBR production would continue in Japan, Thailand and China.
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