LOTTE’s ‘less visible’ side: Its Chemical / Engineering & Construction unit

LOTTE is famed for producing stuff you can see, eat or feel, such as food, distribution and tourism services. However, a huge part of its business is B2B, including its Chemical / Engineering & Construction unit

Set up in the 1970s, LOTTE's Chemical unit is an indelible part of Korea's modern development. The division boasts large-scale production facilities around the world, including in the United States, Malaysia and China, and produces anything from raw materials for petrochemical to special products. LOTTE Chemical comprises a Fine Chemical division, a specialty materials manufacturer, an Aluminum unit, which provides packaging material, and KP ChemTech, a manufacturer of polyester, nylon resins amongst others. As with its other divisions, joint ventures are at the heart of LOTTE Chemical’s effort to build a comprehensive business portfolio. These include LOTTE MCC, a joint investment between LOTTE and Mitsubishi Chemical Co. Ltd, Korea FUJIFILM and Canon Korea Business Solutions, which are partnerships with Japan’s Fuji Film and Canon respectively.

The LOTTE Engineering & Construction (E&C) unit has made huge strides in the construction industry—in part due to the expert leveraging of both its experience and technical prowess. The 555-metre LOTTE World Tower, the world's 5th tallest skyscraper comprising 123 storeys is a case in point. LOTTE Castle, which proffers premium apartments in Korea, is another example. The unit’s work doesn’t only appear in buildings that one could see—equally important is their work in the invisible parts that make up industries and economies, including distribution facilities, power generation, chemical engineering and industrial plants, land transportation facilities such as longspan bridges and tunnels, and water environment facilities.

UZ-KOR Gas Chemical Sturgill / Uzbekistan (left), LOTTE CHEMICAL LOUISIANA LLC / USA (right)

LOTTE Chemical’s all-encompassing reach 

Set up in 1976, LOTTE Chemical produces a wide range of products, ranging from household necessities to agricultural, industrial, medical products, automobiles and cutting-edge new materials.

It is no exaggeration to say that each and every one of us has encountered a LOTTE Chemical product in one way or another. The company is, for example, behind BD (Butadiene), a raw material for synthetic rubber tires used in bicycles and cars, and PC (Poly Carbonate), a plastic used mainly in cell phones but also in clothing material and plastic water bottles, as well as TPO (Thermo Plastic Olefin), a material used in car bumpers.

LOTTE Chemical is present in 22 countries and exports products to more than 120 countries. It has large-scale production facilities in 15 countries around the world, including South Korea, the United States, Malaysia and Indonesia. It has also set up joint ventures with leading chemical companies around the world, including Mitsui Chemical of Japan, Versalis of Italy and Axiall of the United States, to produce and supply various products.

In 2016, it made headlines when it built a natural gas field in Surgil, Uzbekistan--a project that had been under way for more than a decade. The unit also invested USD 3.1 billion to build a Louisiana plant in the United States, and in response, LOTTE Group chairman Shin Dong-bin was invited by US president Donald Trump to the White House to receive a message of congratulations and gratitude. 

LOTTE World Tower in Seoul, Korea (under construction shot)

LOTTE Engineering & Construction: targeted markets, expansion into SEA & Russia

LOTTE E&C has left important footprints in Korea's modern history. These include, for example, the Gyeongbu Expressway, Seoul Subway Line 1, and LOTTE World Tower—all of which has contributed to the development of Korea in the last decades.

Always looking ahead, LOTTE E&C is currently involved in a residential project, a civil engineering project that builds innovative transportation and social infrastructure facilities, and a third to building a base for the production of various industrial materials, a high-rise building project to build landmarks around the world.

In South Korea, the most densely populated country among OECD members, competition in the premium ultra-high-rise residential complex market is fierce. LOTTE E&C ensures it is at the forefront of this trend. 

To cater to increasingly sophisticated tastes, it launched the LOTTE Castle brand in 1999, the goal of which is to provide luxury residences, where equal emphasis is placed on culture as the physical environment. In the last two decades, LOTTE Castle has built 255 complexes, servicing 230,000 households in Korea alone. Last year, it upped the ante with LeEI, a premium residential brand for the ultra high-net-worths. 

Since 2010, LOTTE E&C has continued to expand at an annual average of 4.2 percent, and has grown to become one of South Korea's leading general builders with sales of 5.3 trillion won in 2019.

When it comes to landmarks, the company is perhaps best known for LOTTE World Tower, a 123-story, 555-metre skyscraper in Seoul. As the world’s fifth tallest building, the mat foundation was carefully designed to withstand 750,000 tons of tower load. The mat, constructed from laying 80,000 tons of high-strength concrete for 32 hours with 5,300 ready-mixed concrete, is 1.8 times thicker than the Burj Khalifa (3.7 meters thick), and has 2.5 times more concrete. 

Aside from its home market, LOTTE E&C is actively making inroads into the overseas building market — particularly in Vietnam, Indonesia and Russia, cementing its global status. In Vietnam, LOTTE built commercial facilities including LOTTE Center and Hanoi, but was also involved in the construction of Da Nang and Quang I Road. In Indonesia, Kota Kasablanka 3 project, a residential and business facility, marks LOTTE’s entry into the up-and-coming market. In Russia, the LOTTE mark is seen in such high-end commercial facilities including LOTTE Department Store and LOTTE Hotel Moscow.  

LOTTE World Tower in Seoul, Korea

Looking to a sustainable future

The two units are also tackling sustainability issues such as pollution, global warming and income disparity--one innovation and social programme at a time. 

The success in producing bio PETs was a milestone for LOTTE Chemical in 2012. Bio PET is considered a ‘material of the future’ as it produces 20% less carbon dioxide during the production processes and offers better transparency and plasticity compared to existing materials. In 2019, the company succeeded in mass-producing PLA compounds of 3D printers and tableware materials for infants that have been verified for their eco-friendliness.

LOTTE E&C is taking the lead in building sustainable buildings and cities and reducing the city's negative environmental impact by actively utilising eco-friendly and future energy technologies that lead green growth with the goal of ‘achieving sustainable cities and communities’. LOTTE World Tower utilises new renewable energy such as fuel cells, geothermal energy and wide-area water heat, while the Incheon Port International Passenger Terminal, completed in 2019, is receiving positive reviews for its eco-friendly refrigerants, high-efficiency insulation, geothermal energy and rainwater utilization facilities. 

Aside from its environmental initiatives, the company has also initiated a number of socio-economic policies in Southeast and South Asia. In Malaysia and Indonesia, the company works with schools to sponsor less privileged students — these can be in the form of tuition fees, field trip fees and apprenticeship programmes. Similarly in Pakistan, LOTTE Chemical offers scholarships to less privileged students to continue their studies, and helps a selected few get employed at local offices.

In its home country, LOTTE E&C’s ‘love house volunteer activities that give dreams and hopes’ initiative builds homes for the underprivileged, including low-income families and the disabled. As of the end of 2019, a total of 59 homes and children’s centres have been built.  

With growing calls for governments and corporations to re-examine what sustainability means, LOTTE is all too aware that its role in the global industrial market is two-fold: improve efficiency & performance while offering sustainable solutions for its consumers.