Severe Measures for Poor Performance... 10 out of 13 Lotte Chemical CEOs Replaced

Weak Business Conditions Raise Liquidity Concerns
Triggering Crisis Rumors Across the Group
Accelerating Business Portfolio Transformation Expected

Lotte Group has carried out a large-scale personnel reshuffle to reorganize its chemical business sector. As poor performance led to concerns about a crisis across the entire group, 10 CEOs were replaced in a comprehensive overhaul.

On the 28th, Lotte Group announced that in the 2025 regular executive appointments, 10 out of the 13 chemical sector CEOs were abruptly replaced, excluding those appointed last year at Lotte Aluminium, Lotte Energy Materials, and LC USA. The turnover rate among chemical sector executives was 30%, the highest within the group. Notably, 80% of executives aged 60 and above stepped down, reflecting a strong personnel renewal.

Lotte Chemical Daesan Plant. Provided by Lotte Chemical

A Lotte official explained, "This personnel action is a major renewal for the chemical sector," adding, "The bold personnel overhaul aims to fundamentally change the management structure and hold strict accountability for performance."

The background of this large-scale reshuffle lies in the poor performance of the chemical sector centered on Lotte Chemical. Amid a downturn in the petrochemical market and oversupply issues originating from China, Lotte Chemical recorded a cumulative loss of approximately 1.77 trillion KRW from 2022 through the third quarter of this year.

In the third quarter alone, it posted an operating loss of 413.5 billion KRW, significantly underperforming market expectations. Consequently, Lee Hun-gi, who took office as the head of the chemical sector in March, reportedly tendered his resignation taking responsibility for this.

As the poor performance prolonged, a liquidity crisis also emerged.

Lotte Chemical failed to meet the bond management contract clauses for some public bonds, triggering an Event of Default (EOD). The cause was the failure to maintain a three-year cumulative EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of at least five times as of the end of September.

The slump of Lotte Chemical, a major cash generator for the group, triggered a sense of crisis throughout the entire group. In response, Lotte Group took measures to dispel liquidity concerns, including pledging its core asset, Lotte World Tower, as collateral to banks.

Meanwhile, Lee Young-jun, who will serve as the head of Lotte's chemical sector, is expected to concurrently hold the position of CEO of Lotte Chemical Basic Materials and lead the swift transition of the basic chemical-centered business to a high value-added specialty-focused business structure.

Additionally, through this reshuffle, Hwang Min-jae, Head of the Chemical Sector HQ Technology Strategy Division (Executive Director), was promoted to Vice President and appointed CEO of Lotte Chemical Advanced Materials, while Jung Seung-won, CEO of Lotte INEOS Chemical (Executive Director), was promoted to Vice President and appointed CEO of Lotte Fine Chemical.