First Hurdle Cleared in Petrochemical Industry Restructuring... All 16 Companies Submit Business Plans

Voluntary Capacity Reduction Target Set at 2.7 to 3.7 Million Tons
Full-Scale Implementation Begins Next Year
Government Announces Financial and Tax Support Package

Kim Jeong-Kag, Minister of Trade, Industry and Energy, attended the "Voluntary Agreement Ceremony for Industrial Restructuring to Revitalize the Petrochemical Industry" held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, on the 20th, delivering a welcoming speech. 2025.08.20 Photo by Dongju Yoon.

All 16 NCC and PDH companies located in the three major petrochemical industrial complexes-Yeosu, Daesan, and Ulsan-have submitted their business restructuring plans, marking the first step in the structural reform of the petrochemical industry. The industry is expected to undergo substantial transformation, focusing on voluntary capacity reduction and a shift toward high value-added products.

Kim Jeong-Kag, Minister of Trade, Industry and Energy, presided over a petrochemical CEO meeting at the Korea Chamber of Commerce and Industry in Seoul on the 22nd, announcing that all 16 companies from the three industrial complexes had submitted their restructuring plans by the 19th. This meets the end-of-December deadline set by the government’s “Petrochemical Industry Revitalization Strategy” announced in August.

Minister Kim stated, “The successful submission of restructuring plans by all companies in line with the roadmap marks the completion of the first phase of structural reform,” emphasizing, “From next year, we must accelerate implementation to achieve tangible results.”

The government expects that through the implementation of these restructuring plans, the industry will achieve its self-imposed facility reduction target of 2.7 to 3.7 million tons. The Ministry of Trade, Industry and Energy plans to convene a review committee to evaluate the final business restructuring plans submitted by companies, and upon approval, will simultaneously announce a support package that includes financial assistance, tax benefits, R&D support, and regulatory easing. This policy is intended to provide practical backing for the effective execution of structural reforms.

A support system for transitioning to high value-added and eco-friendly operations will also be launched. On the 23rd, the government will establish the “Chemical Industry Innovation Alliance,” creating a collaborative platform involving anchor companies, small and medium-sized chemical enterprises, and academia and research institutions. The alliance will focus on supporting R&D for advanced and eco-friendly core materials and building industrial infrastructure, with a particular emphasis on prioritizing the R&D needs of companies participating in the restructuring process.

At the meeting, the “Daesan Project No. 1,” a restructuring initiative being promoted by HD Hyundai Oilbank and Lotte Chemical, was also discussed. This project is currently in the preliminary review stage, and the government aims to complete the support package and grant final approval in January next year. Creditor financial institutions are also set to finalize financial support measures based on the results of due diligence.

Minister Kim remarked, “If this year was about preparing the strategy for structural reform, next year will be the year of execution that determines its success or failure,” adding, “The government and businesses will work as one team to see the petrochemical industry’s structural reform through to the end.” He also addressed potential issues for regional small and medium-sized partner companies and employment during the restructuring process, stating, “We will devise a comprehensive support plan for the chemical industry ecosystem in the first half of next year to respond with care.”