Yeochun NCC, the country's No. 3 producer of ethylene, known as the "rice of industry," will halt operations at Plant 2 in addition to Plant 3, which has been offline since Aug. last year, cutting output by 60%. Given that the ethylene capacity of Plants 2 and 3 is 900,000 tons and 500,000 tons, respectively, the reduction could amount to 1.4 million tons of naphtha cracking center (NCC) capacity. In addition, Yeochun NCC plans to establish an integrated corporation by combining it with the Lotte Chemical Yeosu plant.
According to the petrochemical industry on the 9th, Yeochun NCC submitted a business restructuring plan to the government that includes shutting down operations at its Yeosu Plants 2 and 3. The major shareholders of Yeochun NCC, Hanwha Solutions and DL Chemical, are said to have reached a dramatic agreement.
Hanwha Solutions and DL Chemical will provide about 500 billion won to Yeochun NCC, while Yeochun NCC will set up a joint venture with Lotte Chemical for the Yeosu plant. This follows Hanwha Solutions, DL Chemical, and Lotte Chemical submitting materials to the Ministry of Trade, Industry and Resources outlining a business restructuring plan to participate in the government's initiative to enhance the competitiveness of the petrochemical industry and to take part in restructuring within Korea's petrochemical sector.
Regarding this, a Yeochun NCC official said, "This has been discussed before, and Hanwha Solutions, DL Chemical, and Lotte Chemical plan to establish a new joint venture and operate it together," adding, "The three companies plan to reduce part of the downstream." However, a Lotte Chemical official said, "Nothing has been decided about establishing a joint venture."
Earlier, the Ministry of Trade, Industry and Energy and 10 petrochemical corporations held the "industry-led voluntary agreement ceremony for business restructuring for the revitalization of the petrochemical industry" in Aug. last year, and the petrochemical sector agreed to cut NCC capacity by 2.7 million to 3.7 million tons (t), equivalent to 18%–25% of total NCC. Current NCC capacity is 14.7 million tons.