01/05/2021 | Press release | Distributed by Public on 01/05/2021 01:02
The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman BANG, Moon-kyu, 'Korea Eximbank') announced on September 24 that it would arrange a USD 215 million syndicated loan, including USD 90 million from the bank itself, for a polypropylene (PP) plantin Vietnam promoted by Hyosung Chemical.
Korea Eximbank played the role of a madated lead arranger (MLA) for the syndicated loan in which four other Korean financial institutions have participated.
Hyosung Chemical will build a PP* plant with a production capacity of 600,000 tons annually in the Ba Ria Vung Tau region of southern Vietnam.
* Polypropylene (PP): A synthetic resin derived from crude oil and gas, which is lightweight and easy to mold, and is used in various plastic products such as industrial pipes, packaging materials, and textiles.
When the project is completed in 2021, Hyosung Chemical's annual polypropylene production capacity is expected to double from the current 650,000 tons to 1.25 million tons.
In the wake of shale gas development and falling oil prices recently, oil and chemical companies around the world are making every effort to enter new markets and expand production facilities to breathe new life into their business.
Hyosung Chemical has been putting efforts to win this project by signing a memorandum of understanding (MOU) with the Vietnamese government in 2017.
Vietnam is considered to have the perfect conditions to boost trade with its geographical location in the middle of the ASEAN region and tariff advantages it has over its competitors in the region.
As Southeast Asian countries share immense growth potential, their demand for polypropylene, which is widely used from industrial products to household goods, is continuously increasing. So, upon completion of the project, Hyosung Chemical is expected that it will be able to expand its market share in the region.
A Korea Eximbank official said, 'To face the global trend of spreading protectionism, we need to develop new overseas markets with great growth potential and strengthen the competitiveness of basic industries such as materials, parts and equipment.'
He added, 'We have strengthened our economic partnership with Vietnam, a key member of the government's New Southern Policy while we successfully supported Korean companies in the material industry to advance into the Southeast Asian market, through co-financing with four other Korean commercial banks.'