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LG Chem wins a large-scale desalination filter order in Oman

2016.06.13 17:56:03 | 2016.06.15 15:34:40
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South Korea’s leading chemical maker LG Chem Ltd. secured an order to provide seawater filters for the Sohar Seawater Reverse Osmosis (Sohar SWRO) plant in northern coastal region of Oman until the end of 2017, marking it as the largest single desalination filter supply agreement for the company since it officially kicked off commercial production of desalination membranes in September last year.

LG Chem will solely supply reverse osmosis filters to Sohar SWRO plant that international water treatment tycoon Valoriza Agua S.A. is managing as a major stakeholder, the Korean water filter maker said in a disclosure statement on Monday. Under the contract, it will ship over 20,000 units of reverse osmosis filters for the desalination plant, which is equivalent to furnishing 250,000 tons of fresh water for about 800,000 people on daily basis, until the end of next year.

“The contract is valued at several tens of billions won when replacement filters are included,” said an unnamed LG Chem official. The company did not disclose the order value, however, it is estimated to be around $9.5 million considering the company’s past transactions.

LG Chem has won a series of orders in Middle East, Europe and North America in just eight months since the company initiated commercial operation of its water filter plant in Cheongju, a region in central Korea, in September last year. LG Chem has shipped about 40,000 units of reverse osmosis filters to 19 countries throughout the world from the Cheonju plant.

A reverse osmosis filter is a membrane used in water treatment system to desalinate seawater. It filters out salts by applying pressure in seawater and is considered as more efficient compared to conventional water treatment methods such as evaporation and electrolysis.

LG Chem that runs petrochemical, electronic materials, and energy solution businesses envisions reverse osmosis filter as the future primary source of revenue in place of petrochemical business. The company took its first step in water treatment market by taking over the United States-based reverse osmosis membrane manufacturer NanoH2O Inc. in 2014 and has continuously advanced its water treatment technology since then.

The reverse osmosis filter market is divided into three sectors by usage - industrial water treatment, residential water filters, and desalination that converts seawater into freshwater. The industrial sector is the largest by taking over half of the total filter market, and the desalination about 30 percent of the whole. LG Chem has focused its water treatment filter business on the desalination sector.

The worldwide reverse osmosis membrane is expected to grow to 2.2 trillion won ($1.9 billion) by 2020 from 1.5 trillion won in 2015. LG Chem aims to accelerate its water treatment business to expand its shares to 10 percent on global grounds by 2020.

Currently, the international reverse osmosis filter industry is dominated by three firms - Japan’s Nitto Denko Corp., Toray Chemical Inc, and the U.S-based Dow Chemical Co. - with 80 percent market share.

By Chung Wook

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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