SKC

● MCNS set to build a system house in Saint Petersburg, the base of many Korean and Japanese automobile and consumer electronics companies
● MCNS’s 12th system house to be built in Russia for expansion of global production base 

MCNS (Mitsui Chemicals & SKC Polyurethanes Inc.), a polyurethane business established as a joint venture of SKC (President & CEO: Lee Wan-jae) and Mitsui Chemicals Inc. (President & CEO: Tsutomu Tannowa) of Japan, is set to build a system house in Saint Petersburg, Russia to pave the way for its advance into the Russian market. The term “system house” refers to a manufacturing and sales base that provides premium services, such as the customization of polyurethane foam material formulations, including those derived from polyol, to cater to individual customer needs.

At the St. Petersburg International Economic Forum (SPIEF) 2019 held on June 8 in St. Petersburg, Russia, MCNS signed an agreement for investment in the special economic zone (SEZ) and the acquisition of land for the construction of its new system house in Russia with officials of the city government and the president of the SEZ among others. Under the terms of the agreement, MCNS will receive administrative support for approval and licensing for the construction of the factory, as well as tax benefits. MCNS plans to complete the system house, with a production capacity of 15,000 tons, by the first half of 2020. A corporation was established in April for this purpose, and factory design is currently under way. 

Russia is the 11th largest economy in the world in terms of GDP and has a solid domestic market with a population of 140 million. The annual demand for automobiles and refrigerators, whose production requires large amounts of polyurethane, is 3 million and 4 million units, respectively. The annual average growth rate of the polyurethane market is about 5%, with demand for polyurethane expected to increase in the long term. MCNS has made advancing into this region a top priority for some time now.

Major Korean and Japanese clients of polyurethane system products, including Hyundai Motor Company, Toyota and Nissan, have established a strong presence in Saint Petersburg. Hyundai Motor Company is ranked second in terms of market share, while LG Electronics has occupied the second-largest share of the refrigerator market. Although MCNS will supply high-quality products only to Korean and Japanese clients in Russia through the new system house for the time being, it plans to expand its supply to Russian companies in the future.

A spokesperson for MCNS said, “The new system house in Saint Petersburg will be the twelfth one opened by MCNS around the world, following those established in the U.S, Mexico, Poland and India among other countries. In addition to the new system house in Russia, MCNS will continue to expand its international bases mainly in fast-growing regions.”

MCNS was established as a polyurethane company in July 2015 under a 50:50 joint venture involving SKC and Mitsui Chemicals. With a total production capacity of 280,000 tons of polyol, 350,000 tons of MDI and 120,000 tons of TDI, MCNS supplies the raw materials of polyurethane to diverse countries, including the U.S., Mexico, China, Poland and India, via its eleven system houses located throughout the world. [The end] 

[MCNS signed an agreement on the advancement of MCNS with officials of the city government and the president of the special economic zone in Saint Petersburg, Russia: Eui Joon Lim, CEO of MCNS (fourth from left), Tamara Rondaleva, CEO of SEZ of Russia (fifth from left), Shingo Shibata, Co-CEO of MCNS (sixth from left) and Andrey Ivanov, Vice President of SEZ (seventh from left).]