This file photo shows Lotte Chemical Corp.’s Daesan factory in Seosan, about 150 kilometers southwest of Seoul. (Image courtesy of Yonhap)
SEOUL, Nov. 26 (Korea Bizwire) — Lotte Chemical Corp. and HD Hyundai Chemical said Wednesday they have finalized a restructuring plan to reduce the capacity of naphtha cracking centers (NCCs) in an industrial complex in the central region as part of nationwide efforts to reform the petrochemical industry.
The companies said in regulatory filings that their voluntary restructuring plan has been submitted for government approval, allowing them to join the state-led initiative to streamline three major petrochemical industrial complexes in Seosan, Ulsan and Yeosu.
This is the first corporate restructuring plan since the government and the petrochemical industry started discussion on the issue in August.
“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,” the companies said.
Lotte Chemical Daesan Plant (Photo courtesy of Lotte Chemical)
Under the plan, Lotte Chemical will spin off its NCC operations at the Daesan petrochemical complex in Seosan, about 120 kilometers south of Seoul, and the new entity will be merged with HD Hyundai Chemical.
The companies expect the merger to enhance production consistency, improve operational stability and strengthen the overall effectiveness of the restructuring.
They also plan to help boost the competitiveness of the petrochemical industry by shifting to a high-value-added and eco-friendly business structure.
The restructuring plan will be finalized after a government review and approval. The companies will then draw up detailed operational plans through further consultations.
Earlier in the day, Industry Minister Kim Jung-kwan urged petrochemical companies to swiftly submit voluntary restructuring plans and warned that firms missing the yearend deadline will not receive government financial support.
Companies at the two other petrochemical complexes are reportedly preparing plans to join the government initiative.
(Yonhap)
