South Korea's SK Chemicals Co. (006120.SE) said Thursday that it has signed a preliminary deal with U.S.-based Eastman Chemical Co. (EMN) to set up a joint venture, according to Yonhap News Agency.

The joint venture, to be named Eastman Fibers Korea Ltd., will build a plant with annual capacity of 2,700 metric tons of cellulose acetate tow, a raw material used primarily in cigarette filters, Yonhap said.

The plant is scheduled to be built in the city of Ulsan, 414 kilometers southeast of Seoul, sometime between early this year and the second half of next year, it said.

Eastman will hold an 80% stake in the joint venture with SK Chemicals owning the remainder, it said.

-By Seoul Bureau, Dow Jones Newswires; 822-2198-2230; djnews.seoul@dowjones.com

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