South Korean Petrochemical Company Hanwha Solutions [9830:KS] announced a USD282.3m investment plan to expand the production of caustic soda, as reported by the Korea Herald on December 21. Caustic soda is a chemical material widely used as a purifying agent in manufacturing rechargeable batteries, such as those used in electric vehicles (EV). The investment is expected to boost caustic soda manufacturing capacity by 270,000 tons per year. The company’s present petrochemical factory in the southwestern coastal city Yeosu produces 840,000 tons of caustic soda per year.
Hanwha Solutions, backed by South Korean giant Hanwha Group [0880:KS], is the largest producer of caustic soda in Korea. The company plans to increase caustic soda manufacturing in response to the rising demand for EV batteries both domestically and internationally. South Korea’s national Green New Deal, launched in July 2021, has set a target of putting 1.13m electric vehicles and 200,000 hydrogen-powered fuel-cell vehicles on the road by 2025. Correspondingly, the demand for caustic soda in South Korea stood at 1.28m tons in 2020 and is expected to increase by 5% yearly, reaching 1.6m tons by 2025. Furthermore, according to market research firm SNE Research, global demand for EV batteries will reach 406 gigawatt-hours (GWh) by 2023, while supply is expected to be 335 GWh.