Daesan petrochemical complex in Seosan, South Chungcheong Province / Courtesy of Seosan City
A petrochemical industry association on Wednesday welcomed the government's approval of Korea's first restructuring project in the sector, as companies grapple with a prolonged downturn.
The government earlier in the day approved a business reorganization plan involving Lotte Chemical and HD Hyundai Chemical at the Daesan Petrochemical Industrial Complex in Seosan, South Chungcheong Province.
Under the plan, Lotte Chemical will spin off its naphtha cracking center (NCC) operations in Daesan, and the new entity will be merged with HD Hyundai Chemical. It marked the first industry restructuring plan to receive approval since authorities and industry players began discussions in August.
"The industry sincerely welcomes and appreciates the swift approval of the first petrochemical restructuring project with active cooperation from government ministries and related agencies," Eom Chan-wang, vice chairman of the Korea Chemical Industry Association (KCIA), said.
Following the Daesan approval, the government is expected to review and approve additional restructuring proposals for companies operating in the Yeosu complex, South Jeolla Province, and the Ulsan complex, according to the KCIA.
"Globally, ethylene is in oversupply, and petrochemical firms urgently need to reduce output by integrating or streamlining their facilities," a KCIA official said.
Ethylene is a key feedstock used to produce plastics and industrial chemicals for the construction, automotive and other sectors.
The association called on the government to continue providing policy support, including financial assistance and regulatory relief, to help the industry overcome what it described as a "structural crisis."
Source: Korea Times News
