Satellite petrochemical subsidiary plans to construct and operate EAA device project with SKGC

On the evening of March 11, 2021, Satellite Petrochemical issued an announcement stating that the company’s wholly-owned subsidiary Jiaxing Shantely Investment Co., Ltd. ("Shandle Company") and SK Global Chemical Investment (China) Co., Ltd. (SK Global Chemical ( China) Holding Co., Ltd. (referred to as "SKGC Company") signed the "Memorandum of Understanding on Cooperation" in Xuwei New District, Lianyungang City, Jiangsu Province.

In view of the intention of SKGC and Sandre to combine their respective strengths and advantages, Sandre and SKGC or its affiliates jointly invested in a joint venture company in Xuwei New District, Lianyungang City, Jiangsu Province, to build and operate ethylene acrylic acid copolymer (abbreviated as ethylene acrylic acid copolymer). "EAA") device project, the planned EAA device production scale is 40,000 tons/year, and the total investment is about 163 million US dollars. SKGC holds 60% of the equity in the joint venture, and Sandrell holds 40% of the equity in the joint venture.

It is reported that EAA is formed by high temperature and high pressure free radical polymerization of ethylene and ice crystal acrylic acid. Its molecular structure is similar to low-density polyethylene (LDPE). EAA has excellent heat sealability, tear resistance, isolation of air and water vapor, and is widely used in flexible packaging fields such as food and medicine. It has excellent adhesion to metals, glass, etc., and can also be applied to wire, cable, and steel coatings. At present, China's domestic EAA relies on imports. This project is SKGC's third installation in the world and the first installation in Asia.

SKGC is a wholly-owned legal person established by SK Global Chemical in China. SK General Chemical is part of the world's top 500 company SK Group. As a 100% wholly-owned subsidiary of SK Innovation Co., Ltd., the representative company of SK Group's energy and chemical sector, it specializes in the production and sales of basic chemical products. The company was established in 2011 with a registered capital of 130 billion won. The company type is manufacturing, and its business scope is basic organic petrochemical product manufacturing and petroleum refining.

In this regard, Satellite Petrochemical stated that Sandley and SKGC or its affiliates jointly invested in a joint venture company in Xuwei New District, Lianyungang City, Jiangsu Province. Relying on the company's C2 and C3 industrial chain advantages, the construction and operation of EAA device projects is the company's implementation. In the strategy of building an industrialized, large-scale, and technologically advanced chemical new material industry chain with lightweight raw materials as the core, important measures are taken in the form of cooperative development.