Seoul: Lotte Chemical Corp., the chemical arm of South Korea's retail conglomerate Lotte Group, reported a significant increase in net loss for 2025, attributed to a prolonged downturn in the petrochemical industry.

According to Yonhap News Agency, the company's net loss expanded to 2.49 trillion won (US$1.7 billion) from 1.82 trillion won in 2024, as disclosed in a regulatory filing. A company spokesperson noted that the commencement of operations at Lotte Chemical Indonesia's naphtha cracking center in October contributed to increased costs. Additionally, seasonally weak demand for petrochemical products further affected the company's quarterly results.

Lotte Chemical is known for producing essential materials like polyethylene and ethylene, which are crucial in the manufacturing of plastics and industrial chemicals used in sectors such as construction and automotive. The operating loss for the company also increased, reaching 943.6 billion won from the previous year's 914.5 billion won, while sales declined by 7.1 percent to 18.48 trillion won from 19.89 trillion won.

In response to these financial challenges, Lotte Chemical has been restructuring its petrochemical division since early 2025. This restructuring aims to enhance facility utilization and strengthen the company's financial position through the sale of non-core assets. Looking ahead to 2026, the company plans to diversify its portfolio by expanding its range of higher-value petrochemical products, including engineering plastics. Furthermore, Lotte Chemical intends to enter the battery materials market via its affiliate, Lotte Energy Materials Corp.

The company is also set to complete the construction of a cathode foil plant in Kentucky this year, marking the first instance of a South Korean company establishing a battery materials plant in the United States.