On the 19th, petrochemical corporations operating naphtha cracking center (NCC) facilities in the Yeosu and Ulsan petrochemical industrial complexes drew up business restructuring plans and officially submitted them to the government. Starting with LOTTE Chemical, HD Hyundai Oilbank, and HD Hyundai Chemical in Daesan, South Chungcheong Province, jointly submitting their business restructuring plans at the end of Nov., all 10 petrochemical corporations have now submitted their plans.
On the 19th, LG CHEM and GS Caltex said, "We submitted business restructuring plan materials to the Ministry of Trade, Industry and Energy to participate in implementing the plan to enhance the competitiveness of the petrochemical industry and restructuring the domestic petrochemical sector," adding, "The plan submitted this time is a broad framework, and we plan to flesh it out through further discussions." Hanwha Solutions, DL Chemical, and LOTTE Chemical also confirmed they "submitted business restructuring plans." SK Geocentric, Korea Petrochemical Ind. Co., and S-Oil in Ulsan submitted their business restructuring plans that night.
According to the petrochemical industry, LG CHEM and GS Caltex are known to have set a general direction to establish a joint venture and shut down one NCC unit. LG CHEM operates two plants in Yeosu. Plant 1, with a capacity of 1.2 million tons, began operations in 1991, and Plant 2, with a capacity of 800,000 tons, has been operating since 2021. GS Caltex's NCC facility, with a capacity of 900,000 tons, has been operating since 2021. As a result, in the industry, closing LG CHEM's Plant 1, the oldest facility, is being strongly discussed.
Yeochun NCC, another petrochemical corporation in Yeosu, is known to be discussing not only the closure of Plant 3 (470,000 tons), which has been shut down since Aug., but also an additional unit closure in cooperation with LOTTE Chemical. The industry expects Hanwha Solutions, DL Chemical, and LOTTE Chemical to establish a new joint venture and operate it together.
Yeochun NCC operates three plants in Yeosu: Plant 1 has a capacity of 900,000 tons, Plant 2 has 915,000 tons, and Plant 3 has 470,000 tons. However, Plant 1 and Plant 3 are originally owned by DL Chemical, and Plant 2 is originally owned by Hanwha Solutions, so it is known that the parties struggled to find common ground until the end. LOTTE Chemical likewise decided to reduce NCC facilities in Daesan, and is said to have been reluctant to agree to additional cuts.
The Ulsan petrochemical industrial complex submitted its business restructuring plan on the evening of the 19th, the submission deadline. It is known that the plan centers on reducing NCC facilities and reorganizing around downstream operations in the Ulsan region.
An industry official said, "In the Ulsan petrochemical industrial complex, besides SK Geocentric, Korea Petrochemical Ind. Co., and S-Oil, there are about 100 midsize and small companies whose main businesses are downstream," adding, "We focused discussions on measures to sustain downstream companies across the entire complex."
Meanwhile, Minister Kim Jung-kwan of the Ministry of Trade, Industry and Energy is scheduled to hold a meeting with the chief executives of 10 petrochemical companies on the 22nd. They are expected to discuss government support measures under the restructuring plans.