Hyundai Oilbank Halts 360 Billion KRW Investment in CDU and VDU Facilities

[Asia Economy Reporter Seongpil Cho] Hyundai Oilbank has decided to halt its new investment of 360 billion KRW in CDU (Crude Distillation Unit) and VDU (Vacuum Distillation Unit) facilities.

According to industry sources on the 27th, Hyundai Oilbank made this decision at a board meeting held the previous day. CDU and VDU are facilities that produce petroleum products such as gasoline and diesel by distilling crude oil. Hyundai Oilbank had decided to invest in the construction of these facilities in May 2019.

Hyundai Oilbank explained the reason for stopping the investment as follows: "The unexpected outbreak of COVID-19 and the surge in raw material prices due to intensified global inflation have created an environment where continuing the construction is difficult." They added, "Due to rising costs, the profitability of this investment deteriorated, and it became difficult to make a reasonable forecast of the raw material market outlook, making it inevitable to halt the investment."

Previously, Hyundai Oilbank had been pursuing an initial public offering but suspended the listing process in July this year, citing the expansion of global uncertainties.