Hanwha Chemical Turns
to Value-Added Products

Conducts strenuous efforts to secure competitive edge

Hanwha Chemical has played leading roles in laying a foundation for helping Korea join the ranks of global chemical powerhouses as the company, which became the first Korean company to produce poly vinyl chloride (PVC) in 1966, churned out such products as low density poly ethylene (LDPE), linear low density poly ethylene (LLDPE) and chlor alkali (C/A) for the first time in Korea.
Entering the 1980s, Hanwha Chemical launched the C/A business to lay a foundation for the chemical and precision chemical industry for the first time in Korea and become a representative company that has built up harmony with the synthetic resin business. The company is now catapulting into a few chemical companies in the world capable of producing a range of organic and inorganic chemical products.
Hanwha Chemical has gained global recognition in terms of technology and quality competitiveness as it has focused on technology development and quality improvement by making the most of state-of-the-art research facility and excellent research manpower in the science town of Daedok in Daejeon. The company takes a lead in the domestic markets of LDPE, LLDPE, PVC and C/A. while at the same time establishing itself as a leader in the Asian markets.
The company has world-class excellent technology in production/operation as well as environment and safety fields.
Hanwha Chemical, armed with accumulated safety know-how, has adopted advanced systems of Dupont and Dow to have world-class environment and safety management systems.
Entering the 1990s, Hanwha Chemical focused on nurturing value-added industries by capitalizing on advance technologies. These efforts paid off: The company succeeded in localizing new materials like insulation materials for electricity, which was imported at the time and commercialized technology on the process of treating recalcitrant waste water in order to not only transform the domestic petrochemical industry into a value-added industrial field, but also bringing competitiveness one step higher by ensuring environmental protection.
In July 1999, Hanwha Chemical separated the processing sector, a downstream business, and around the end of the same year, the company reached the private sector's first voluntary big deal with Daelim Industrial to establish a new naphtha cracking center with Daelim and conduct an exchange of businesses under the win-win strategy designed to ensure management innovations. Yeochun NCC Co., Asia's one of the biggest NCC joint venture between Hanwha Chemical and Daelim Industrial, has secured economy of scale to have a competitive edge in the purchase unit cost of naphtha.
In 2000, the company built up the ERP system to raise management transparency in all business sectors. In 2002, Hanwha Chemical disposed of its headquarters building in Uljiro, a major restructuring step designed to cut down on borrowings and improve its financial soundness.
In 2004, Hanwha Chemical posted a record high of business performance since its founding despite crude oil price hikes and severe recession of the domestic economy. The company achieved a feast ― surpassing the 2 trillion mark for the first time since its foundation and a record high of production thanks to strenuous efforts to secure the industry's top-class competitive edge and conduct aggressive sales activities.
Hanwha Chemical has declared a vision of retaining the leading position in the industry by securing Asia's top-class competitiveness as a successful business partner of clients and established development plans according to each business sector. The company has established each unit performance system, introduced a reward system designed to improve the moral of its executives and staff members, while striving to establish a corporation taking social responsibility by committing itself to ethical management and social contribution activities.

SOUPED-UP COMPETITIVENESS IN CORE BUSINESS SECTORS
The polyethylene business, Hanwha Chemical's core sector, will raise the percentage of such specialized products as ethylene vinyl acetate (EVA) in a bid to brace for an overcapacity, caused by the Middle East's move to build or expand large-scale plants. The vinyl business will accelerate its effort to continuously cut down on unit costs through process improvement, optimize process and build up balanced vertical integration. At the same time, the company will beef up activities to boost new domestic demands for PVC, secure overseas production centers, upgrade profit structure and construct power plants to secure a stable supply of electricity with the goal of becoming one of the world's top 10 companies.
A look into Hanwha Chemical's sales shows that the company has achieved both quantitative growth and qualitative change in the composition of products on the market.
In 2003, Hanwha Chemical transformed its production line for existing normal products into the one for producing EVA and PVC copolymer with its own technology. Sales of these value-added products have since shown signs of a surge every year. Recently, Wire & Cable Compound production process has been upgraded to produce value-added products, helping the company raising the percentage of value-added, specialized products.
Besides, the company is striving to develop advanced technologies as it did in the development of super voltage wire compound on its own and expand sales of such value-added products as HS-LLDPE and PVC paste resin.
Hanwha Chemical is accelerating its effort to penetrate into new markets like Southwest Asia, Central America and Africa and the Middle East, which are emerging as substitutes for China where competition has been heating up with multinational corporations'entry. Its mainstay product PVC is enjoying explosive growth in such countries as the Middle East, India, Pakistan and Bangladesh. The company has successfully penetrated into markets of construction materials and PVC for automotive parts, with sales and profit projected to rise with economic growth of these countries.
Hanwha Chemical has already established locally incorporated companies or representative offices in Ghangzou, Shanghai and Beijing to build up a stable sales network and expand direct transactions with actual consumers. Its Indian branch covers the Southwest Asian area, including India, while locally incorporated firms in the United States have been recently set up to strengthen their presence into American and South American markets.
Hanwha Chemical is striving to develop new businesses and new growth engines with a strategy of choice and concentration. The company is setting its sights on an entry into nano-technology-based material field while seeking to explore new business opportunities with M&As and license-in relationship. The company plans to strengthen its presence in the ceramic powder sector it has developed with its own technology, while seeking an early commercialization of ICT/electronics materials based on supercritical technology and display materials.
For its survival in a cut-throat business environment and sustainable development, Hanwha Chemical has conducted the Absolute Competitive Edge (ACE), designed to reform all management activities, including production boost, quality improvement, energy conservation and consciousness enlightenment.
All executives and staff members'management innovation efforts have brought about a 76 billion won profit improvement during 2005. In particular, energy conservation and cost-saving efforts are expected to bring more benefits in an era of crude oil price hikes.
During 2006, the company has been accelerating its innovative activities in all sectors to cope with business uncertainties like crude oil price hikes and a rapid appreciation of the Korean currency. The company has revised a master plan for beefing up competitiveness with the goal of raising cost-saving amounts by 51 billion won during 2005, compared to the previous year, through overall cost-saving activities like purchase, distribution and repairing cost reductions. The company has been aggressively conducting energy conservation activities like boil efficiency improvement and steam reduction efforts as it did last year.
Hanwha Chemical has made strenuous efforts to secure top-class competitiveness by upgrading equipment to advanced levels through optimum investment, process improvement, development of value-added products, etc. nw

(from left) Engineers at Hanwha Chemical. Hanwha Chemical's Yeosu petrochemical plant. Hanwha Chemical CEO Hur Won-joon.

Hanwha Chemical's Ulsan Plant & researchers