Seoul: Lotte Chemical Corp. and HD Hyundai Chemical have announced the completion of a restructuring plan aimed at reducing the capacity of naphtha cracking centers (NCCs) within a central industrial complex. This initiative aligns with nationwide efforts to reform the petrochemical sector.
According to Yonhap News Agency, the companies have submitted their voluntary restructuring plan for government approval, thereby participating in a state-led initiative to streamline the major petrochemical complexes located in Seosan, Ulsan, and Yeosu. This marks the first corporate restructuring plan since discussions between the government and the petrochemical industry began in August.
The companies stated, "In accordance with the special act on corporate revitalization, we jointly applied for government approval to implement corporate revitalization measures and participate in the restructuring of the domestic petrochemical industry."
As part of the restructuring, Lotte Chemical plans to spin off its NCC operations at the Daesan petrochemical complex in Seosan, approximately 120 kilometers south of Seoul. The newly formed entity will merge with HD Hyundai Chemical. The anticipated merger aims to enhance production consistency, improve operational stability, and strengthen the effectiveness of the restructuring.
The companies also intend to bolster the competitiveness of the petrochemical industry by transitioning to a high-value-added and eco-friendly business model. The restructuring plan will reach finalization following a government review and approval, after which the companies will develop detailed operational plans through further consultations.
Earlier, Industry Minister Kim Jung-kwan called on petrochemical firms to promptly submit their voluntary restructuring plans, cautioning that companies failing to meet the yearend deadline would not qualify for government financial support. Companies at the other two petrochemical complexes are reportedly in the process of preparing plans to align with the government initiative.