Lotte Chemical and HD Hyundai Chemical Finalize Petrochemical Restructuring Plan
Lotte Chemical and HD Hyundai Chemical have finalized the first major petrochemical restructuring plan, submitted for government approval. This initiative aims to reduce naphtha cracking center (NCC) capacity at the Daesan complex. Lotte Chemical will spin off its NCC operations, merging them with HD Hyundai Chemical. The move seeks to enhance production consistency, operational stability, and shift towards high-value-added, eco-friendly business structures, boosting industry competitiveness as part of a state-led reform.
Lotte Chemical Corp. and HD Hyundai Chemical have finalized and submitted the first major corporate restructuring plan for government approval, marking a significant step in South Korea's state-led initiative to reform its petrochemical industry. This plan focuses on reducing the capacity of naphtha cracking centers (NCCs) within the Daesan industrial complex in Seosan, one of three major petrochemical hubs targeted for streamlining, alongside Ulsan and Yeosu. Discussions for this industry-wide reform began in August.Under the specific details of their proposal, Lotte Chemical will execute a spinoff of its NCC operations located at the Daesan petrochemical complex. The newly formed entity from this spinoff will subsequently merge with HD Hyundai Chemical. Both companies anticipate that this strategic consolidation will lead to enhanced production consistency, improved operational stability, and a stronger overall effectiveness of the restructuring efforts. Furthermore, a core objective is to boost the competitiveness of the domestic petrochemical industry by transitioning towards a more high-value-added and eco-friendly business structure.The restructuring plan's finalization is contingent upon government review and approval. Following this, the companies will proceed to develop detailed operational plans through further consultations. The urgency for such plans was recently emphasized by Industry Minister Kim Jung-kwan, who urged petrochemical companies to submit their voluntary proposals by year-end, cautioning that firms failing to meet this deadline would not qualify for government financial support. Other companies within the remaining petrochemical complexes are reportedly also preparing to submit their restructuring plans.
