Lotte Fine Chemical Secures 10,000 Tons of Indonesian Automotive Urea

First Achievement of Korea-Indonesia Intergovernmental MOU on Element Introduction

[Asia Economy Reporter Hwang Yoon-joo] Lotte Fine Chemical announced on the 7th that it has secured 10,000 tons of automotive urea from Indonesia as the first result of the long-term urea cooperation memorandum of understanding (MOU) between the governments of Korea and Indonesia.

The 10,000 tons of urea secured by Lotte Fine Chemical is enough to produce approximately 30,000 tons of automotive urea solution, which corresponds to about 1.5 months of total domestic demand for automotive urea solution.

Due to the global shortage of urea supply and Indonesia's domestic shortage during the peak season from October to March, the Indonesian government has effectively halted urea exports. However, Indonesia was the most promising urea supplier besides China in terms of geographical accessibility and production scale. Through efforts by the Ministry of Trade, Industry and Energy and Indonesia’s Ministry of State-Owned Enterprises, the urea cooperation MOU was signed.

As the first achievement of this intergovernmental MOU, on the 7th, Lotte Fine Chemical, as the representative importer of the Urea Diversification Promotion Council (Urea Alliance) composed of 15 urea-related companies, signed a contract with Indonesia’s largest state-owned urea company 'Pupuk' for the supply of automotive urea ranging from a minimum of 6,000 tons to a maximum of 10,000 tons through active negotiations. The contracted quantity will be imported into Korea by the end of December or early 2022, considering the local supply and demand situation, and delivered to the Urea Alliance companies.

Combining the total 19,000 tons of urea previously secured by Lotte Fine Chemical using the group and Chemical HQ’s global network with the 10,000 tons secured on behalf of the Urea Alliance companies through this contract, the total corresponds to about four months of domestic automotive urea solution demand, which is expected to significantly contribute to the stability of domestic urea solution supply.