Posco Chemical CEO Min Kyung-jun and OCI CEO Kim Taek-joong agree to establish a hydrogen peroxide joint venture in Seoul on Feb. 21, 2020. [Photo by Posco Chemical]

Posco Chemical Co., a refractory and secondary battery materials making unit of South Korean steel giant Posco, on Friday has agreed with the local chemical and green energy company OCI Co. to set up a joint-venture to produce high-purity hydrogen peroxide, core material in making chips and displays.

The agreement comes after the two companies signed a memorandum of understanding for the chemical business in April last year.

The new joint-venture will be owned 51 percent by Posco Chemical and 49 percent by OCI, and they aim to start its commercial operation in 2022.

High-purity hydrogen peroxide raw ingredient will be obtained from coke oven gas, a by-product of the steel making process, and it is widely used for etching and cleansing process of semiconductors and displays as well as for making antiviral cleaning products for the novel coronavirus (COVID-19).

OCI expects to secure stable and economical supply of high-quality raw materials and further enhance its competitiveness in the hydrogen peroxide business. Posco Chemical also hopes its partnership with OCI would help it add more value to its steel making process and strengthen the materials business on its portfolio.

Posco Chamical is accelerating forays into various materials businesses to become a leading global name in the industry. Its parent Posco announced its plan to integrate the secondary battery materials business of the group into one under Posco Chemical in January.

“The joint-venture will help meet the surging demand for high-purity hydrogen peroxide from major chipmakers in Korea,” said Posco Chemical and OCI.

Kim Taek-joung, chief executive of OCI, in a conference call following its fourth-quarter statement release recently expected the joint-venture’s revenue to reach 50 billion won ($41.1 million).

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