Kim Jeong-Kwan: "Final Petrochemical Restructuring Plan Likely by First Quarter Next Year"

"Healthy Companies Take the Initiative for Future-Oriented Restructuring"
"The Government Will Play an Active Role... Committed to Resolving Challenges"

Following the submission of the year-end business restructuring plans, discussions on restructuring the petrochemical industry are moving forward, with the government expecting the final restructuring plan to take shape within the first quarter of next year. Kim Jeong-Kag, Minister of Trade, Industry and Energy, stated, "We expect to have the 'final petrochemical business restructuring plan' ready within the first quarter of next year."

Minister Kim, speaking to reporters immediately after the Petrochemical Industry Business Restructuring CEO Meeting held on the 22nd at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, said, "This restructuring is not something companies are doing because they have no other choice due to difficulties. Rather, it is the first time that healthy companies are working together for their future." He added, "There are various challenges in the process, such as communication issues with holding or parent companies and labor-management relations." He continued, "The government will also play an active role in addressing these issues."

Kim Jeong-Kag, Minister of Trade, Industry and Energy, is answering questions from reporters immediately after the Petrochemical Industry Business Restructuring CEO Meeting held on the 22nd at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Oh Ji-eun

Minister Kim remarked, "When we first started in August, there was skepticism not only among companies but also within the government about whether this could be accomplished by the end of the year, and most media outlets also thought it would not be easy. Nevertheless, it is meaningful that companies and the government have come this far together." Regarding the upcoming schedule, he explained, "The first project was already submitted last month, and since we have decided to proceed with tailored approaches for each project, we expect to have a suitable plan for the first project by the end of January next year." On November 26, Lotte Chemical and HD Hyundai Chemical, which operate a naphtha cracking center (NCC) at Daesan Industrial Complex in Seosan, South Chungcheong Province, announced that they would integrate two ethylene production facilities, with capacities of 1.1 million tons and 850,000 tons, respectively, into a single system.

From the corporate side, companies presented the support measures they need during the restructuring process. Kim Jonghyun, Vice Chairman and CEO of DL Chemical, said, "The most challenging issue is the high cost of raw materials," adding, "This is a significant difficulty for the industry." DL Chemical is a major shareholder of Yeochun NCC along with Hanwha Solutions.

Kim Jonghyun, Vice Chairman of DL Chemical, is seen talking with reporters immediately after the Petrochemical Industry Business Restructuring CEO Meeting held on the 22nd at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. Photo by Oh Jieun

Vice Chairman Kim also commented on the progress of the integration between Yeochun NCC and Lotte Chemical facilities in Yeosu, South Jeolla Province, saying, "We began discussions with the intent of pursuing structural innovation among companies located in the Yeosu Industrial Complex and submitted the proposal to the government. That was the situation as of last week." Regarding which plant-among Yeochun NCC Plants 1 and 2 and Lotte Chemical facilities-would be closed, he noted, "We need to determine which plant would be the most economical to shut down."

The government plans to enter the full-fledged implementation phase of restructuring as soon as the final business restructuring plan is submitted. Minister Kim stated, "We are still at the initial stage," and added, "There was a consensus that the government and companies should work together to address any challenges that may arise in the future."