Tie-ups: LG Chem/Volkswagen to cooperate on green materials for auto sector; PTTGC/SCGC provide update on jv for olefin/polyolefin businesses in Thailand

South Korea’s LG Chem is cooperating with Volkswagen Group to explore next-generation materials for future mobility. It announced that it had recently signed a MoU to “develop and expand the application of next-generation, eco-friendly mobility materials.

The signing ceremony was attended by executives from both companies, including Stefan Gramse, Executive Vice President and Head of the Exterior Materials Procurement Group at the Volkswagen Group, and Kim Sangmin, Senior Vice President and Head of LG Chem’s Petrochemicals Company.

Under this agreement, the two companies will collaborate on developing next-generation plastics and composite materials, as well as on reducing vehicle weight and improving performance, using LG Chem’s ABS (high-value-added synthetic resin) and EP (engineering plastics). ABS and EP are high-performance plastics with impact strength, durability, and processability, and are widely used primarily in the exterior components of home appliances and in automotive interior and exterior parts.

In addition, LG Chem plans to strengthen its competitiveness in sustainable materials for future vehicles by exploring ways to expand the use of its PCR (Post-Consumer Recycled) materials and cost-efficient material solutions in the interior and exterior components of the Volkswagen Group’s major automotive brands.

LG Chem has a total annual ABS production capacity of 2.35 million tonnes both domestically and internationally, and maintains a portfolio of ABS products, including high-gloss, high-heat-resistant, and paintless varieties, that can be immediately applied to customer-specific applications such as side mirrors and radiator grilles.

In 2020, LG Chem became the first in the industry to successfully produce white-coloured post-consumer recycled (PCR) ABS and is currently continuing to expand its portfolio of PCR materials for automotive interior and exterior components. In addition, the company is strengthening its partnerships with global automakers through a variety of automotive solutions, such as paintless ASA and high-gloss, high-heat-resistant ABS, that help customers improve manufacturing efficiency, reduce costs, and achieve vehicle lightweighting.

The two companies agreed to actively collaborate on various research and development initiatives, including feasibility studies for the application of specific materials, while also sharing information on technology trends and global market developments related to next-generation mobility materials.

The agreement reflects a shared interest in exploring innovative and sustainable material solutions for future mobility applications. LG Chem aims to expand the market for high-value-added, eco-friendly automotive materials such as ABS and EP.

Kim Sangmin, Senior Vice President and Head of LG Chem’s Petrochemicals Company, said: “We expect this to be a meaningful starting point for global automakers and materials companies to jointly drive innovation in future mobility materials. Based on our technological capabilities and competitiveness in the field of high-value-added, eco-friendly materials, we will work with our customers to set new milestones for sustainable growth.”

In other news, Thailand’s PTT Global Chemical Public Company Limited (GC) and SCG Chemicals Public Company Limited (SCGC) have provided an update on the study for the formation of a joint venture, which is said to be progressing according to plan. The two companies have entered the confirmatory due diligence phase and are continuing discussions to determine the key terms of the transaction, while further assessing and quantifying the synergies expected to arise from combining the respective strengths, capabilities, and assets of both parties.

The scope currently under study comprises GC’s olefins and polyolefins businesses in Thailand, including GC’s shares in HMC Polymers Co. as well as SCGC’s olefins and polyolefins businesses in Thailand, including olefins crackers, polyethylene (PE) and polypropylene (PP) production facilities, together with SCGC’s shares in relevant joint venture companies, namely Siam Polyethylene Co, Siam Synthetic Latex Co, Thai MMA Co. and Bangkok Synthetics Co.

Upon establishment, the joint venture is expected to hold the shares in the aforementioned joint venture companies currently held by GC and SCGC.

Under the transaction framework currently contemplated, GC is expected to become a major shareholder of the joint venture, while SCGC is expected to remain a significant shareholder.

The two companies expect to finalise the key transaction parameters by October 2026, including the shareholding structure, transaction steps, and quantified synergies expected to arise from this.

The companies will subsequently submit the relevant filing application to the Trade Competition Commission of Thailand (TCCT) for the required approval.

GC and SCGC say they will continue the study thoroughly, with the objective of combining their respective strengths to enhance efficiency across the supply chain.

The potential joint venture represents an important strategic step toward establishing a leading petrochemical player in the region and strengthening Thailand’s competitive advantage. By bringing together the strengths of GC and SCGC, both of which have long played significant roles in Thailand’s petrochemical industry, the jv is expected to enhance operational excellence through greater scale and an integrated supply chain, improve feedstock management efficiency, and strengthen downstream capabilities with a greater focus on high value added and differentiated products.

These combined strengths are expected to enhance long-term competitiveness at both the regional and global levels.

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