Martin Midstream Partners LP (MMLP) announced on Oct. 19 that through an affiliate Martin ELSA Investment LLC, it has entered into definitive agreements with Samsung C&T America Inc. (SCTA) and Dongjin USA Inc., an affiliate of Dongjin Semichem Co. Ltd., to form DSM Semichem LLC (DSM). DSM will produce and distribute electronic level sulfuric acid (ELSA).
DSM will leverage the existing assets of MMLP located in Plainview, Texas, and installing additional facilities as required, DSM will produce ELSA that meets the strict quality standards required by the recent advances in semiconductor manufacturing.
MMLP will own a 10% non-controlling interest in DSM and will be the exclusive provider of feedstock to the ELSA facility. MMLP, through its affiliate Martin Transport Inc., will also provide land transportation services to end-users of the ELSA produced by DSM.
“We are excited to partner with Samsung C&T America Inc. and Dongjin USA Inc. in this unique opportunity to capitalize on the diverse and complimentary skillsets, operating expertise, and vast market knowledge of the three parties,” said Bob Bondurant, MMLP President and CEO. “The new facilities will incorporate technology currently being utilized to produce ELSA in Taiwan, which exceeds the quality of sulfuric acid being produced in the United States today.”
Assuming growth capital investments of approximately $20 million, the partnership expects to realize annual distributable cash flow of $5-$6 million from both the improvements to the existing assets and its interest in DSM. The ELSA facility is estimated to start-up in the first quarter of 2024.
“This strategic alliance allows the partnership to capitalize on our existing asset base to participate in the manufacturing and transportation supply chain of the most advanced and power-efficient chip technology to date,” Bondurant said. “ELSA supply presently sourced in the US does not meet current domestic demand, and with announced new fabrication and existing fabrication facility expansions, we anticipate an attractive market for the ELSA produced in Plainview.”
MMLP said it will fund the capital improvements and the contribution to DSM through a long-term land lease and using available capacity under its revolving credit facility.
SCTA is a global trading and investment company that functions as an independent American subsidiary of the Samsung C&T Corp. Trading & Investment Group. Since being formed in New York in 1964, SCTA has been engaged in the trading of industrial materials and operates thermal power generation and renewable energy projects across North, South, and Central America. The Trading & Investment Group operates globally in trading and project organizing with a network of 70 offices in 42 countries. It pursues and develops businesses around the world in the areas of chemicals, steel, energy, and materials.
Dongjin Semichem Co. Ltd. is a publicly traded global manufacturer of fine chemicals, headquartered in Seoul, Korea. With operations across Asia, Europe, and the US, it holds a portfolio of products for diverse applications in the electronic materials industry, with major product lines include display materials, semiconductor materials, and renewable energy materials.