LG Chem is reportedly set to halt operations at its Yeosu Styrene Monomer (SM) plant by the end of this month, raising concerns that restructuring in the petrochemical industry may become a reality.
According to industry sources on the 13th, LG Chem is considering stopping operations at the SM plant by the end of this month. SM is a raw material used in synthetic resins and synthetic rubber. Prices have sharply declined due to a combination of capacity expansions by Chinese companies and sluggish demand, worsening profitability.
Since the appointment of Vice Chairman Shin Hak-cheol, LG Chem plans to foster eco-friendly materials, battery materials, and global new drugs as its three major new growth engines, focusing on improving operational efficiency and restructuring its existing petrochemical business.
Last year, the company sold its film business, including polarizers and polarizer materials, from the IT materials division to a Chinese firm. There have also been rumors about the sale of shares in the Yeosu Naphtha Cracking Center (NCC) Plant 2, which produces basic petrochemical feedstocks such as ethylene.
Regarding the rumors about the sale of Yeosu NCC Plant 2, LG Chem announced, "We are reviewing various options to strengthen the competitiveness of our petrochemical business and enhance business value, but no concrete decisions have been made yet."
Other petrochemical companies are also moving to divest non-core businesses. Lotte Chemical is reportedly seeking acquisition candidates for Lotte Chemical Titan (LC Titan) among domestic and international petrochemical companies and large private equity funds (PEFs). LC Titan is a leading Southeast Asian chemical company with operations in Malaysia and Indonesia, acquired by Lotte Chemical in 2010 for 1.5 trillion won.
SK Geo Centric halted operations at its Ulsan NCC plant in 2020 after 48 years and is accelerating business restructuring by establishing a comprehensive plastic recycling complex.
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