Polybutene (PB) is one of the few specialty products that domestic chemical companies have dominated in the global market. By early on turning their attention to items that larger competitors had not approached, they have successfully secured competitiveness to withstand economic downturns after more than 30 years of focused effort.
Located in Hwachi-dong, Yeosu, Jeollanam-do, the DL Chemical Yeosu plant. Director Jo Jeong-bok explained that through continuous investment, he has enhanced the competitiveness of PB products and widened the gap with the second-place company. As of last year, DL Chemical recorded a 25% share in the global PB market, maintaining a dominant first position.
Polyethylene (PE), the most common chemical product made by domestic petrochemical companies, resembles small white grains, but DL Chemical's main product, PB, is produced in a colorless and odorless liquid form. Director Jo noted, "PB has a simpler manufacturing process compared to other chemical products, and its production efficiency is high. It also features low environmental impact due to the absence of chlorine components in the production process."
PB is a petrochemical product predominantly used as a raw material for lubricant additives and fuel detergents. Naphtha extracted by distilling crude oil is produced through a decomposition process into C2 (ethylene), C3 (propylene), C4 (butadiene), and C5, depending on the number of carbon links. DL Chemical creates 'C4 Raffinate-1 (C4 R-1)' utilizing the mixed C4. PB consists of polymers derived from C4 R-1, providing benefits such as ▲ high viscosity ▲ excellent chemical stability ▲ low volatility ▲ high electrical insulation, making it useful in various industrial sectors.
PB possesses diverse physical properties based on molecular weight, leading to various applications. PB with a lower molecular weight has low viscosity and is used in lubricants and cosmetics, while PB with a higher molecular weight is used in adhesives or sealants that require high viscosity.
DL Chemical began its foray into PB production over 30 years ago. Daelim Industrial, which acquired Honam Ethylene established in 1975, set up the Daedeok Research Institute in 1992 and developed the first general-purpose PB in Korea in the same year. In 2010, DL Chemical developed high-reactivity PB for the first time in the country, exporting it to the United States since 2015. Currently, the annual production capacity of its two PB plants located in Yeosu reaches 220,000 tons.
When DL Chemical ventured into the development of PB, it was a business field that other large petrochemical companies were not interested in. General chemical products, such as polyethylene, had high demand and profitability in the global market, providing no compelling reason to invest in the relatively small PB market. Given that DL Chemical was relatively small, it sought opportunities in the niche market of PB, as competing in the general chemical product sector against large firms was challenging.
As a result of focusing on PB for a long time, DL Chemical has gained expertise in development and production and is now recognized for its world-class technical capabilities. In PB products, the high-reactivity PB production technology, considered a high-value product, is held by only three companies worldwide: DL Chemical, Germany's BASF, and TPC in the United States. DL Chemical is the only company in the world capable of producing both general-purpose PB and high-reactivity PB at a single plant.
A petrochemical industry official noted, "Currently, the technological level of PB products has advanced to the point where other petrochemical corporations cannot easily narrow the technological gap with DL Chemical, even if they enter the development phase."
DL Chemical's strategy of focusing on PB product development and production for over 30 years is proving effective in the domestic petrochemical market, which is currently facing severe downturns. The domestic petrochemical industry showed rapid growth until the early 2020s, but faced a crisis as China began large-scale factory expansions in the late 2010s, flooding the market with products. Domestic companies had primarily produced base chemical products like ethylene, but with China securing its technological edge, they lost price competitiveness.
Even amid the recent recession, chemical companies that have succeeded in defending their performance produce specialty products requiring unique technological prowess. PB, which DL Chemical has dominated, is also cited as one of the specialty items that China has yet to catch up with. DL Chemical's consolidated revenue for the third quarter of last year was 1.2319 trillion won, marking an 11.9% increase compared to the same period last year, with an operating profit of 47.7 billion won, achieving a turnaround to profitability.
Based on the technological capabilities secured in the PB sector, DL Chemical plans to expand its production items to automotive and construction adhesives, and electronic material potting.
A DL Chemical official stated, "We are creating a continuous growth foundation amid the recession based on the firm trust in the market for PB products," and added, "We will continue to pursue a specialty strategy that can generate steady revenue regardless of market conditions."