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(Seoul=Yonhap Infomax) Jae Heon Lee – South Korea has unveiled its first major project aimed at restructuring the domestic petrochemical industry, as Lotte Chemical Corp. and HD Hyundai affiliates move to integrate naphtha cracking center (NCC) facilities at the Daesan petrochemical complex.
The Ministry of Trade, Industry and Energy (MOTIE) announced on the 26th that it has received an application for approval of a business restructuring plan related to the petrochemical sector from HD Hyundai Oilbank, HD Hyundai Chemical, and Lotte Chemical Corp. This marks the first concrete proposal by companies since the government outlined its petrochemical industry restructuring roadmap in August.
According to the submitted restructuring plan, Lotte Chemical will spin off its Daesan plant operations and merge them with HD Hyundai Chemical—a joint venture between HD Hyundai Oilbank and Lotte Chemical. The move aims to rationalize NCC and general-purpose petrochemical production facilities, addressing chronic overcapacity in the sector, and to establish an efficient operational structure through vertical integration of refining and petrochemical businesses. The companies also plan to accelerate a shift toward high value-added products, strengthening their mid- to long-term profit base.
MOTIE has supported companies in developing joint restructuring plans through consulting and other assistance. The submitted plan will be closely reviewed by the Business Restructuring Review Committee under the Act on Corporate Revitalization, assessing whether it meets requirements for structural change and business innovation, as well as targets for productivity and financial soundness.
Companies approved for restructuring will be eligible for incentives such as tax benefits and special exemptions under the Commercial Act. Upon approval, a tailored support package—including tax, R&D, cost reduction, and regulatory relief measures coordinated across ministries—will also be announced to facilitate the industry overhaul.
Kim Jung-kwan, Minister of Trade, Industry and Energy, stated, “We expect to enhance competitiveness against state-of-the-art facilities in the Middle East and China through improved efficiency via vertical integration of refining and petrochemical operations.” He added, “The process is progressing about a month ahead of the government’s original year-end deadline for restructuring plan submissions.”
Kim further emphasized, “The government will provide focused support to companies actively participating in restructuring, while maintaining ongoing dialogue with the industry to ensure additional projects can submit plans by year-end. Transitioning to a high value-added and specialty-focused business structure is also crucial for strengthening competitiveness, and we will intensively support participating companies through the ‘Petrochemical Industry High Value-Added R&D Roadmap.’”
jhlee2@yna.co.kr
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