Invest KOREA

Arkema & Korea: Partners With Chemistry
Arkema Korea is poised to innovate in an environment ideal for growth

 Denis Tual, president of Arkema Korea, gives a lively interview. He gets up a lot. He rifles through drawers for information on polymers and new production sites. Also the president of Arkema Japan, he mutters something about the thing he’s looking for maybe being in Japan. But ah, here it is.

 Pebax. More than half the players in the 2014 World Cup wore cleats made with this Arkema-produced thermoplastic elastomer. The pair of neon green running shoes on Tual’s shelf ­ those are the type worn by Usain Bolt. They’re next to a cluster of pastel-colored plastic squares that looks like a kid’s toy: Transparent plastic made with Arkema chemicals, the sort that makes up the artificial marble in a bathroom.

 “It’s not easy for the public to know what a chemical company is doing, just seeing its plant in a remote industrial place with a lot of pipes and reactors,” said Tual. “But when we see the final product, that helps.”

 Arkema, a leading specialty chemicals and advanced materials company headquartered in France, started doing business in Korea in 1993, when it first sold its products here. Known back then as Elf-Atochem, and then Atofina, the company started making acquisitions and entering into joint ventures in Korea in 1998. Since then, Arkema has developed business with growing Korean companies. Today, it has four locations here, two of which are production facilities.

 “I think that already, at that time, we had some idea that Asia, and especially Korea, were starting their expansion,” said Tual. “So Korea was naturally a market for Arkema if we wanted to be a worldwide company.”

 Last month, Arkema and Korea’s CJ CheilJedang held in Malaysia the grand opening of Arkema’s first world-scale thiochemicals complex in Asia. The USD 450 million investment is a two-part joint venture between Arkema and CJ CheilJedang. It is Arkema’s largest investment ever and first major investment with a Korean company. The first joint venture (Arkema 86 percent, CJ CheilJedang 14 percent) manufactures methyl mercaptan and other substances to be used for, among other things, refining and soil fumigation. The second joint venture (CJ CheilJedang 86 percent, Arkema 14 percent) manufactures biomethionine for animal feed with on-site methyl mercaptan. The products made in Malaysia will be sold not only in Malaysia, but also in Korea and throughout Asia.

 “It’s a major step for us in our relations with Korea,” said Tual. “In many ways, Korea is having a bigger and bigger importance for Arkema globally.”

 Arkema has three business segments -- High Performance Materials, Industrial Specialties and Coating Solutions -- and 12 business units, all of which apply to Arkema Korea. The global Arkema recorded 7.5 billion euros in sales last year, more than 40 percent of which came from Europe, and 25 percent from Asia. Arkema Korea had turnover last year of about KRW 230 billion (USD 204.8 million).

 “The growing range will be Asia,” said Tual.

 Arkema’s appointment of Korea’s Kyung Nong Corporation last year as its exclusive distributor for Paladin in Korea shows that this range is considerable. The move marks the first entry of Paladin, a new soil fumigant created by Arkema, in Asia Pacific.

 With Arkema’s acquisition of water-based rheology additives designer and producer Coatex, the global specialty chemicals supplier Sartomer and, most recently in February, the international adhesives company Bostik, Arkema Korea has merged with the Korea staff of each of the companies.

 The goal is to create products that address mega-tendencies including new energies, renewable raw materials, solutions for electronics, water treatment and lighter materials. For Arkema, which ranked among Thomson Reuters’ “Top 100 Global Innovators” in 2014 for its fourth straight year, innovation is key, which makes it a good match for Korea.

 “Of course, innovation in Korea ­ it’s totally natural for Korean people,” said Tual.

 Having Korean clients that are global leaders, including Samsung, Hyundai, Kia and LG, helps Arkema Korea be inventive and innovative in meeting their expectations, he added. And though the company does business now with the big players, it is interested in working with small, strong and innovative Korean companies through common ventures or acquisitions in the future.

 “We see Korea has a great potential for that,” said Tual.

 The president also aims to expand Arkema Korea’s research and development (R&D) resources and staff and possibly partner with a Korean university, as the company already has a partnership with the Ulsan National Insitute of Science and Technology for lithium ion battery separators.

 Going forward, Arkema plans to use Korea as a hub.

 “In the past, we used a lot Singapore as a global Asian hub, but we are starting to use more and more Korea,” said Tual. “I think that Korea could become a hub, a bigger hub of free distribution.”

By Chang Young (young.chang@kotra.or.kr)
Executive Consultant / Invest Korea