Koo Yooncheol Says "Accumulated Structural Problems Are Holding the Economy Back...2.1 Trillion Won to Be Injected into Petrochemical Restructuring"

Economic Ministers' Meeting and Ministers' Meeting on Strengthening Industrial Competitiveness

Koo Yooncheol, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, is delivering remarks at the joint Meeting of Ministers on Economic Affairs and on Strengthening Industrial Competitiveness held at the Government Complex Seoul in Jongno-gu, Seoul, on the 25th. Photo by Ministry of Economy and Finance

Koo Yooncheol, Deputy Prime Minister and Minister of Economy and Finance, said on the 25th, "The government and creditor banks will provide more than 2.1 trillion won in support so that Daesan No. 1, which has raised the anchor for preemptive business restructuring, can sail smoothly."

Deputy Prime Minister Koo made this remark at the "Economic Ministers' Meeting and the Ministers' Meeting on Strengthening Industrial Competitiveness" held at the Government Complex Seoul on the same day, saying, "Our economy is undergoing a period of great upheaval in which the global economic and industrial paradigm is changing."

Deputy Prime Minister Koo said, "Structural problems that have accumulated over time are holding us back," and stressed, "A crab can only grow by shedding its hard shell. Only by breaking away from long-standing practices through preemptive innovation can we create new opportunities for our economy."

On this day, the government approved the business restructuring plan for the Daesan No. 1 project, which will merge HD Hyundai Chemical and Lotte Chemical in the Daesan petrochemical complex.

Deputy Prime Minister Koo announced, "By shutting down aging NCC facilities, we expect to ease oversupply and create synergies through vertical integration of refining and petrochemicals," adding, "To improve the financial structure, we will make self-rescue efforts such as a 1.2 trillion won capital increase and plan to invest about 335 billion won in shifting to high value-added products."

He went on to say, "Along with 2 trillion won in financial support, including new funding for high value-added conversion and the conversion of perpetual bonds, we will reduce acquisition tax by up to 100% and the Investment Win-Win Cooperation Promotion Tax by up to 50%." The government plans to apply special measures such as succession of licenses and permits and streamlined procedures in cases of corporate spin-offs and mergers, and to alleviate electricity costs by designating a distributed energy special zone.

A plan to rationalize the advance payment system was also announced that day. Deputy Prime Minister Koo stated, "We will rationalize the advance payment system to support smooth contract execution while enhancing accountability in fiscal management."

The government plans to allow, at the time of the initial advance payment, payments within the mandatory range of 30% to 50%, but, if contract performance is verified, to permit payments of up to 70%. However, when the ordering agency deems it necessary, such as for overseas raw material purchases, it will allow the initial advance payment itself to be up to 70%.