SCG Chemicals Public Company Limited (SCGC) has inked a joint venture (JV) agreement with Denka Company Limited (Denka), Japan.

The JV was established to operate an acetylene black manufacturing business in the province of Rayong. The production capacity will be approximately 11,000 tonnes annually and is expected to commence by early 2025.

Denka's acetylene black is a unique type of carbon black with high purity and electrical conductivity. It is primarily used as a component in the production of lithium-ion rechargeable batteries for electric vehicles (EVs), in addition to being employed in applications for high-voltage transmission cables to generate electricity from offshore wind power, for which market demand is rising.

This JV will help propel SCGC's business strategy, which is centered on creating High Value-Added Products & Services (HVA) in response to future megatrends and customer needs.

The JV agreement was signed by Tanawong Areeratchakul, CEO and President of SCG Chemicals or SCGC, and Toshio Imai, President and CEO of Denka Company Limited. The signing ceremony was witnessed by Roongrote Rangsiyopash, President and CEO of SCG. Through this joint venture, SCGC will hold 40% of the shares while Denka will hold the remaining 60%. 

SCGC aims to become a leading integrated chemical player, with its main business being producing plastic resins or polymers that can be molded into consumer goods. In addition, it enters into other related businesses, including clean energy solutions and industrial innovations, with a business strategy aimed at upgrading the High Value-Added Products & Services (HVA) alongside offering products that meet megatrends, which is anticipated to expand with consumer usage in five key industries: infrastructure, consumable packaging, health and well-being, energy solutions, and automotive.

Areeratchakul said, "Both SCGC and Denka lay a focus on doing business alongside environmental stewardship. Establishing this joint venture is a stabilizing factor in SCGC's continued growth. The joint venture with Denka underlines SCGC's corporate objectives, which include responding to megatrends and promoting the use of electric vehicles that are more environmentally friendly. It also exhibits the ability to be a successful strategic partner and receives constant recognition from global partners."

Imai added, "Denka placed a significant emphasis on operating healthcare business, energy and environmental businesses, particularly in the areas of EV and 5G, which are among the company's primary strategies, while SCGC operates chemical business in Thailand with the aim of becoming a leading integrated chemical player in ASEAN. This joint venture combines the excellent raw material sourcing and petrochemical plant management capabilities of SCGC with those of Denka, a leading global manufacturer of acetylene black with unique technology, extensive distribution channels, and a strong network. Importantly, this joint venture will help expand the electric vehicle battery production industry, which is expected to increase in the future."

Following the formation of a joint venture, the production facilities of Denka and SCGC will be launched concurrently. It has initially set an annual output target of around 11,000 tonnes, with production anticipated to begin in early 2025. Details of this investment is expected in early 2023, once the final investment decision (FID) has been made.