Celanese Corporation, a global chemical and specialty materials company, announced the completion of the restructuring of Korea Engineering Plastics Co. (KEP), a joint venture owned 50 percent by Celanese and 50 percent by Mitsubishi Gas Chemical Company, Inc. (MGC), as previously announced in December 2020.

Celanese and MGC believe that focusing KEP’s efforts on manufacturing and supplying its shareholders with a leading portfolio of innovative products is a necessary response to the globalization of the engineering plastics industry, the fragmentation of the marketing supply chain, and other changes in industry conditions since KEP was first formed in 1987 to manufacture and market polyoxymethylene (POM) in Asia, with a particular focus on serving domestic demand in South Korea. This restructuring will also allow Celanese greater access to original equipment manufacturers in Asia, as well as more direct participation in key markets outside of China.

“With the completion of this restructuring, Celanese now has access to world-scale POM polymerization capabilities globally, with committed access to approximately 70kta of POM production in Asia and corresponding global marketing rights,” said Tom Kelly, Senior Vice President, Celanese Engineered Materials.

“Celanese maintains typical governance rights of the KEP joint venture and is excited to create further value from its 50 percent stake in KEP through this restructuring. Celanese will benefit from KEP’s technical manufacturing expertise and broad product portfolio that will be marketed using Celanese’s commercial teams, project model and global supply chain network.”

With the completion of the restructuring, Celanese and MGC will continue to look into additional ways to leverage KEP’s manufacturing strengths, including assessing potential future expansions of its polymer and compounding capabilities. Included in the final terms of the restructuring, Celanese agreed to sell land to KEP, currently leased by KEP, at its Ulsan, South Korea site, at a market value of approximately $10 million, thereby monetizing a non-strategic asset for Celanese and further solidifying KEP’s presence in Ulsan.