The Lee Jae-myung government will hold the Conference of Ministers on Strengthening Industrial Competitiveness (CIMIC) this week to discuss the 'petrochemical restructuring plan.'
According to related ministries on the 18th, the government will conduct a closed CIMIC this week, chaired by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol, to discuss the restructuring plan for the petrochemical industry. A government official noted, "We plan to discuss various measures to induce voluntary restructuring of petrochemical corporations."
This meeting is the first CIMIC since the launch of the Lee Jae-myung government. President Lee instructed on the 14th, "Prepare comprehensive measures encompassing the restructuring of the petrochemical industry, facility adjustments, and technology development."
This is not the first time the government has placed petrochemical restructuring on the CIMIC agenda. In December last year, it finalized measures to enhance the competitiveness of the petrochemical industry, including ▲ supply of policy finance ▲ application of special provisions of the Corporate Vitality Act ▲ simplification of corporate merger reviews, and provided support. Initially, additional measures were to be announced in the first half of this year, but preparations have been delayed due to a lack of a control tower.
In this meeting, there is a high possibility that while maintaining the framework of those measures, there will be strong demands for practical restructuring of corporations, such as facility consolidation and production cuts. There is also interest in whether the easing of fair trade law regulations, which the industry has consistently requested, will be included.
Additionally, measures to extend tariff exemptions for naphtha and crude oil for naphtha production to alleviate raw material cost burdens, as well as designating Seosan in South Chungcheong Province as an 'industrial crisis preemptive response area' are expected to be discussed. Seosan is home to Daesan Petrochemical Complex, one of Korea's three major petrochemical complexes, and it applied to the government for the designation of the area last month.
Attention is drawn to whether the government will take additional measures if corporations do not participate in production cuts or facility adjustments. Minister of Trade, Industry and Energy Kim Jeong-kwan previously emphasized, "Petrochemical corporations must take joint responsibility, using the restructuring of the shipbuilding industry as a mirror," adding, "Strict multi-ministerial responses will follow for corporations that do not initiate voluntary business restructuring."