The Korea Petrochemical Industry Association (the association), a credit entry group credit entry the domestic petrochemical industry, is having difficulty selecting its next chair. The reason, reportedly, is that chief executive officers (CEOs) of major petrochemical corporations are reluctant to take the post.
With oversupply from China weighing on the petrochemical market and making it a time to focus on internal management, it is said they feel burdened about also taking on the role of representing the industry to the government.
According to the Korea Petrochemical Industry Association on the 19th, the association plans to hold a board meeting and a regular general meeting at the end of this month to nominate a new chair. The chairs attending the board will gather opinions and elect the new chair.
A member of the chairs' group said, "We are holding the general meeting at the end of this month, but everyone has declined, so we have not yet decided who will take the next chair."
The current chair is Shin Hak-Cheol, vice chair of LG Chem. Since taking office as chair in Jan. 2023 and serving another term, Shin's tenure runs through this year.
Shin will step down from the CEO post at LG Chem in March and also leave the chair. Under the association's bylaws, the chair must be a member company's CEO.
Major chemical corporations had agreed to rotate the chair every two years in the order of LG Chem→SK Geocentric→Hanwha Solutions→Lotte Chemical→Kumho Petrochemical. At the end of 2024, it was SK Geocentric's CEO's turn to serve as chair. However, at the time, SK Geocentric declined on the grounds that former President Choi Ahn-seop had been newly appointed, leading Shin to serve another term.
Within the association, Kim Jong-hwa, president of SK Geocentric, is being mentioned as Shin's successor. But Kim, who was also newly appointed this year, is said to have cautiously declined, saying it would be difficult to perform the chair's duties. If Kim does not take the chair, candidates will have to be sought among other member corporations' CEOs.
Because the chair must coordinate member companies' views and serve as a negotiation channel to the government and the National Assembly, the practical workload is said to be heavy. In particular, with government-led restructuring of the petrochemical industry underway, the workload has recently increased.
The fact that petrochemical corporations have posted poor results and need to focus on internal management is also cited as a reason CEOs are avoiding the chair.
Lotte Chemical recorded an operating loss of 943.6 billion won last year. Operating losses at LG Chem's petrochemical institutional sector and Hanwha Solutions' chemical institutional sector also reached 356.0 billion won and 249.1 billion won, respectively. SK Innovation's chemical industry institutional sector posted an operating loss of 236.5 billion won.
A member of the chairs' group said, "With the market weak, many newly appointed CEOs are coming in, and it is not easy for them to step up and take the chair," adding, "It is not a simple honorary position, so it requires a heavy sense of responsibility, and there are many external activities involving communication with the government, which makes it burdensome." The person added, "Still, for negotiations, wouldn't it be better for a large corporations to take the chair?"