OCI Acquires all of the shares in P&O Chemical, a Joint Venture with POSCO Future M,
Accelerating its Expansion into the Semiconductor and Rechargeable Battery Materials Businesses
- OCI decided to acquire all of the shares in P&O Chemical, a joint venture with POSCO Future M.
- OCI aims to normalize the performance and achieve mid- to long-term growth of P&O Chemical through synergies with its existing businesses.
- Expects to strengthen the competitiveness of the semiconductor and rechargeable battery materials businesses and diversify its portfolio.
- CEO YooShin Kim said, “This lays the foundation to grow into a global advanced materials company by creating various synergies and exploring business opportunities.”
OCI announced that its Board of Directors approved the acquisition of all shares in P&O Chemical, a joint venture with POSCO Future M, at its regular meeting on August 26.
Following the approval of the Board of Directors, OCI will enter into a share purchase agreement with POSCO Future M to acquire POSCO Future M’s stake in P&O Chemical for KRW 53.7 billion. After the purchase agreement, P&O Chemical will become a subsidiary of OCI through a merger filing.
P&O Chemical is a joint venture established by OCI and POSCO Future M in July 2020 to produce high value-added materials from byproducts of steelmaking, with OCI holding 49% of the shares and POSCO Future M holding 51%. With a hydrogen peroxide production plant with an annual capacity of 50,000 metric tons completed in 2022, P&O Chemical is producing high-purity electronic grade hydrogen peroxide used in semiconductor fabrication processes. A plant for the production of high-softening-point pitch, a coating material for anode materials of rechargeable batteries, was completed in the second half of 2023 and is currently in trial operation.
P&O Chemical’s performance is still weak because it is in the early stage of business. However, based on OCI’s long-standing technology and production capabilities and the creation of synergies between businesses, P&O Chemical plans to normalize its business operations and achieve mid- to long-term growth. In particular, It is expected that product quality and cost competitiveness will improve by establishing a close linkage with the Iksan plant, which produces high-purity hydrogen peroxide. Meanwhile, high-softening-point pitch is an essential coating material of the anode materials that enhances both stability and efficiency of rechargeable batteries, and P&O Chemical plans to start its mass production from 2025. To address the long-term growth of global anode material market, the company will focus on maximizing profitability by acquiring additional customers.
With the acquisition of P&O Chemical, OCI aims to strengthen the competitiveness of its semiconductor and rechargeable battery materials businesses and expand a portfolio of advanced materials businesses. With the recent recovery of the semiconductor business, semiconductor chip makers, including Samsung Electronics, are planning to increase their production capacity, which will lead to increased demand for high-purity hydrogen peroxide. OCI plans to proactively prepare for increased customer demand with the acquisition of P&O Chemical. In addition, OCI succeeded in commercialization of high-softening-point-pitch for the first time in Korea by utilizing its proprietary technology, and through the partnership between OCI and P&O Chemical, OCI will enhance product competitiveness and develop various high value-added products to accelerate the expansion of the rechargeable battery materials business.
After the acquisition of P&O Chemical, OCI and POSCO Future M will maintain a close business relationship based on a long-standing partnership. OCI will secure a stable supply of byproducts of steelmaking, a core raw material from the POSCO Group, while P&O Chemical will supply high-softening-point pitch, a coating material for anode materials, to POSCO Future M, further creating synergy between OCI and POSCO Future M.
OCI CEO YooShin Kim said, “With the acquisition of P&O Chemical, OCI will be expected to further expand the scope of its advanced materials sector such as semiconductor and rechargeable battery materials. In the future, OCI will actively generate synergies with P&O Chemical and explore business expansion opportunities in advanced materials to grow as a semiconductor and rechargeable battery materials company.” (end)