LCY：Seeking New Opportunities Amidst the Wave of Change

LCY: Seeking New Opportunities Amidst the Wave of Change

As a chemical company established in 1965, LCY Chemical Corporation (hereinafter referred to as "LCY") has a presence in high-performance materials, electronic materials, and biomass materials. How can the company leverage its competitive advantages and strategize amidst the ever-changing global economic landscape and increasingly fierce industry competition? Recently, LCY's Senior Vice President Wang Renlong and his team were interviewed by our magazine. They discussed LCY's development strategies, innovative practices, and sustainable development paths in the face of industry challenges and opportunities.

Global Expansion to Mitigate Supply Chain Risks

LCY Chemical Corporation (LCY) has five major business units: High-Performance Materials Division, Industrial Solutions Division, Electronic Materials Division, Biomass Chemical Solutions Division, and Interconnect Solutions Division. The High-Performance Materials Division, led by Wang Renlong, primarily produces PP, high-performance composites, thermoplastic elastomers, and emulsion styrene-butadiene rubber.

Regarding the impact of global economic uncertainties, Wang Renlong stated, "This has posed some challenges to our supply chain, potentially leading to different stability requirements from our customers in various regions. In this regard, LCY has a certain layout advantage in our service areas, such as thermoplastic elastomers. We have factories in mainland China, Taiwan, other parts of Asia, and the United States, which can reduce the risk of supply chain disruptions."

To accelerate global expansion, LCY recently entered into a strategic partnership with CVI Group, a chemical technology products company, to jointly establish a joint venture—LVI Materials Ltd. (LVI). This company will focus on the R&D and business promotion of polypropylene (PP) modified materials. The company has set up its sales headquarters in Hong Kong and uses Malaysia as its production base. With its geographical advantages, it can better provide high-performance, sustainable material solutions for customers in the automotive, electronics, home appliances, and construction industries in China and Asia.

Currently, LCY has transferred some mature formulations of modified materials to its Southeast Asian production base, such as PCR PP products, flame retardant, and anti-static products. Wang Renlong stated that in the future, LVI plans to leverage the R&D team in Taiwan and the production base in Malaysia to develop more formulations that meet the needs of local customers. Innovation Empowering Differentiation

Wang Renlong believes that in the rubber and plastics industry, oversupply is a recognized issue. LCY may not be able to compete with large global chemical plants in terms of scale, but it places great emphasis on new product development and customer interaction. Over the past year, the company has launched a series of new thermoplastic rubber and polypropylene (PP) products, innovatively providing special medical-grade products in a highly competitive market. Additionally, using polypropylene modification technology, they have developed modified materials with a recyclable polypropylene content of up to 50%, addressing market changes with differentiated products. "We hope that through market insights and customer interactions, we can understand market and customer needs and develop differentiated products," said Wang Renlong.

In the high-performance materials business, the Chinese mainland market accounts for more than 40% of the business, with medical-grade PP being one of the main products. LCY is committed to providing safe, reliable, and high-performance materials for the global medical market, such as radiation-resistant polypropylene (PP) and high-transparency, low-impurity thermoplastic elastomers (SEBS 9645D/9550U), continuously promoting technological innovation to contribute to a healthier and safer medical environment. LCY's infusion sets have been sold in the Chinese mainland market for many years, occupying a significant market share. Currently, the production plant for medical materials is located in Taiwan. In the future, the company is considering increasing the production of medical-grade elastomers at its Huizhou plant. Deepening Focus on Recycled Plastics

LCY has set a goal to reduce emissions by 42% by 2030. The company manages related projects through its Sustainability Development Department, incorporating the concept of product life cycle assessment into product design and formulating the "LCY Sustainable 6R". The company is also actively promoting energy-saving and emission-reduction projects in process improvement and equipment replacement, such as MVR steam recovery and reuse, process temperature control energy-saving improvements, elimination of variable frequency equipment, and optimization of control systems. Additionally, the department responsible for electronic materials has technology for recycling electronic solvents, which plays a positive role in reducing carbon emissions.

LCY has made significant progress in the field of recycled materials. The post-consumer recycled polypropylene raw materials come from strategic suppliers in Taiwan, who provide 100% certified recycled polypropylene with stable quality. According to Wang Renlong, LCY's R&D team can develop formulations that mix recycled materials with new materials based on customer needs. The downstream applications of recycled PP are extensive, covering footwear, cosmetic packaging, household items, and the automotive industry. Despite the fierce competition and market supply-demand imbalance in the polypropylene industry, LCY believes that the future demand for recycled materials will be stronger than for new materials, and the company will continue to deepen its focus in this field. Actively Embracing the AI Technology Wave

Additionally, LCY is actively embracing the AI technology wave. From employee training to practical work in various departments, the Data Science team from the Digital and Information Division and the Base Digitization team from the Operational Excellence Division assist the company in data analysis and the implementation of automated systems. AI Insight and AI School focus on process optimization and improving R&D efficiency. In business promotion and marketing, AI is also used to gather valuable information, aiding market analysis and customer insights.

"AI can improve processes by analyzing years of accumulated data. We have internal teams and third-party companies conducting research in this area. For example, in electronic materials production, AI can predict steam usage, potentially saving millions of Taiwanese dollars annually. The procurement department uses AI for raw material price forecasting. Additionally, AI is used to correct errors in processes, improve product yield, and reduce defects and excessive material usage. AI is our business accelerator, helping us achieve our goals faster," said Wang Renlong.