South Korea’s LG Chem Ltd. will produce seawater desalination materials in Saudi Arabia starting in 2026.

The company announced Wednesday that it has signed an agreement with Saudi Arabia‘s Al Khorayef Group to localize production of reverse osmosis (RO) membranes.

RO membranes convert seawater into fresh water, facilitating industrial water production and wastewater reuse.

Al Khorayef Group is a prominent conglomerate in Saudi Arabia whose businesses include water treatment, refining, energy, shipbuilding and defense.

Under the agreement, LG Chem and Al Khorayef Group will commence production of RO membranes in Saudi Arabia in 2026.

The facilities are estimated to cost up to 320 million riyals ($85 million).

The two parties have also pledged to strengthen cooperation on additional water treatment projects in Saudi Arabia and the broader Middle East market, utilizing the facilities established in Saudi Arabia.

The Saudi government’s preference for locally manufactured goods in the procurement of public water treatment projects will provide a competitive advantage, they noted, while local production not only mitigates tariffs, but also streamlines the lead time for Middle Eastern customers to place and receive orders.

Hyung Hoon, who oversees LG Chem‘s RO membranes division, said that the company is determined to “actively target the Saudi and Middle Eastern markets” through its collaboration with Al Khorayef Group.

Meanwhile, LG Electronics Inc. is seeing outstanding performance in the heating, ventilation and air conditioning (HVAC) sector with its large chillers.

The company said Wednesday that its chillers have achieved an average sales growth of nearly 40 percent in overseas markets over the past three years.

“It is playing a leading role in driving the growth of business-to-business (B2B) HVAC business, one of our new growth engines,” said a company official.

Chillers are integrated cooling systems that circulate cold water through a heat exchanger to provide cool air, and are primarily installed in large buildings and factories.

LG Electronics entered the chiller market by acquiring the HVAC business unit of LS Mtron Ltd. in 2011.

By Chung Seung-hwan, Seong Seung-hoon, and Chang Iou-chung

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