First Vice Minister of Industry Holds Meeting with Petrochemical Companies
Recently, the petrochemical industry has been struggling due to global oversupply, China's economic slowdown, and cost burdens from high oil prices. In response, the government has decided to pursue an additional extension of the tariff exemption on naphtha (naphtha feedstock).
On the 3rd, the Ministry of Trade, Industry and Energy held a meeting chaired by First Vice Minister Kang Kyung-sung to discuss measures to overcome the crisis in the petrochemical industry. Major petrochemical companies such as LG Chem, Lotte Chemical, SK Geocentric, and Kumho Petrochemical attended the meeting.
During the meeting, the ministry reviewed the recent petrochemical market conditions, exports, and investment environment, and listened to the difficulties and requests from the petrochemical industry.
Kang Kyung-sung, First Vice Minister of the Ministry of Trade, Industry and Energy, is presiding over the first meeting of the Advanced Robot Economy Task Force (TF) held on March 21 at the Korea Trade Insurance Corporation in Jongno-gu, Seoul. [Image source=Yonhap News]
The participants agreed that the petrochemical industry is currently facing a complex crisis and that it is necessary to boldly move away from the existing business structure focused on general-purpose products and swiftly transition to high value-added fine chemicals and eco-friendly products.
Vice Minister Kang Kyung-sung stated, "The petrochemical industry is a core foundational industry closely linked not only to its own sector but also to other key industries such as semiconductors and secondary batteries. Therefore, the government and industry must unite as one to overcome this crisis." He added, "To this end, we are consulting with tax authorities on an additional extension of the tariff exemption on naphtha, a key raw material, and will provide closer support for the timely completion of large-scale petrochemical projects such as the Shahin Project through a dedicated investment support task force."
The government had previously reduced the tariff rate on naphtha and crude oil used for naphtha production to 0% starting July 6 last year, and extended this once until the first half of this year to enhance the competitiveness of the petrochemical industry and stabilize prices of daily necessities.
On this day, the government and companies agreed to launch the "Petrochemical Industry Competitiveness Enhancement Council," which includes experts from industry, academia, and research institutes, to conduct a precise diagnosis of the current domestic petrochemical industry situation and explore various support measures to overcome the crisis and secure competitiveness.
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