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SK Chem. to increase biodiesel output
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August 22, 2009
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SK Chemicals Co. plans to increase production of biodiesel as it expects the renewable energy sector to grow and competition to increase in its core business of making chemicals, a vice president said.
The Korean maker of plastics and oil-based chemicals has increased the size of its biodiesel plant in Ulsan, Korea, and has plans to build facilities in Europe and the U.S., said Hang-duk Roh, a company spokesman and vice president of the new businesses division.
“We are focusing on our ‘green business,’ no longer petrochemicals,” Roh said in Singapore yesterday. Plastics producers like Saudi Basic Industries Corp. and Iran Petrochemical Commercial Co., which are located near crude oil and natural gas reserves, will be able to keep production costs lower than SK Chemicals, which imports these resources, Roh said. The Middle East will become a main producing region of oil-based chemicals in the future, he said.
The Ulsan plant, which produces biodiesel from palm oil, has completed expansion works this year to triple production capacity to 120,000 metric tons a year from 40,000 tons, Roh said. SK Chemicals has agreed to sell 60,000 tons of biodiesel from the plant to European commodities trader Trafigura Beheer BV in 2010, with a high possibility of extending the contract after it ends in 2011, said Tom O’Brien, a director at Trafigura, at the signing ceremony in Singapore yesterday.
The biodiesel will be sold in Europe, the world’s biggest market for the fuel. European biodiesel demand was around 10 million tons a year, Roh said. Bloomberg
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