An aerial view of part of the Ulsan Petrochemical Industrial Complex. (Photo courtesy of the Ulsan Metropolitan Government)
SEOUL, Dec. 23 (Korea Bizwire) — The South Korean government on Tuesday laid out a five-year strategy aimed at overhauling the country’s chemical industry, betting that a shift toward high-value and environmentally friendly products will help it fend off mounting competition and chronic oversupply from China.
Under the plan, announced by the Ministry of Trade, Industry and Energy, Seoul aims to elevate South Korea to the world’s fourth-most advanced chemical industry by 2030, up from its current fifth-place ranking in the transition toward higher-value production.
The road map seeks to move the industry away from large-scale output of commodity chemicals such as ethylene and propylene—products increasingly squeezed by China’s expanding capacity—and toward specialty materials used in advanced manufacturing sectors. Target areas include packaging materials for on-device artificial intelligence chips, components for foldable and wearable electronics, electrolytes for next-generation lithium batteries, and electronic systems for electric vehicles.
To support the transition, the government said it will expand funding for research and development, accelerate commercialization of advanced technologies and promote the adoption of artificial intelligence across chemical manufacturing processes.
As part of the initiative, the government has joined forces with about 130 chemical companies and research institutions to launch a chemical industry innovation alliance, designed to coordinate investment, technology development and supply-chain collaboration.
The strategy dovetails with a broader restructuring push under way in the petrochemical sector. All 16 of South Korea’s major petrochemical producers have recently submitted preliminary restructuring plans, including proposals to cut combined naphtha cracking capacity by as much as 3.7 million tons, in an effort to restore profitability in a market plagued by oversupply.
Officials said the new road map is intended to ensure that downsizing in commodity chemicals is paired with a sustainable growth path anchored in higher-margin, technology-driven products—an approach the government hopes will preserve the industry’s global competitiveness over the next decade.
M. H. Lee (mhlee@koreabizwire.com)
