Sixteen corporations located in Korea's three major petrochemical industrial complexes all submitted business restructuring plans to the government on the 22nd. The plans say they will voluntarily cut production facilities to break out of the structural slump caused by oversupply.
On the day, the Ministry of Trade, Industry and Energy held a meeting with the petrochemical industry at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul, chaired by Minister Kim Jung-kwan, and gathered opinions on business restructuring.
The 16 corporations that submitted restructuring plans have production facilities in the Yeosu, Daesan and Ulsan industrial complexes. Their business lines fall largely into two categories: NCC (naphtha cracking center), which produces ethylene by cracking naphtha, and PDH (propane dehydrogenation), which produces propylene using propane as a feedstock.
The government believes that if these corporations faithfully carry out their restructuring plans, the industry's voluntary facility reduction target of "2.7 million–3.7 million t" can be achieved. Minister Kim said, "All corporations submitted restructuring plans within the roadmap deadline," and added, "Next year, speedy restructuring is needed to deliver tangible results."
If, going forward, corporations submit their final business restructuring plans, the government will decide on approval after a review committee. Corporations that receive approval will be offered a support package that includes finance, tax measures, research and development (R&D), and regulatory easing.
At the meeting, the "Daesan No. 1 Project," for which HD Hyundai and Lotte applied for business restructuring approval, was also discussed. To prevent difficulties for local small and mid-sized corporations and employment shocks during the restructuring process, the government plans to draw up a "comprehensive support plan for the chemical industry ecosystem" in the first half of next year.
Meanwhile, the "Chemical Industry Innovation Alliance" will be launched on the 23rd. The alliance, established to support high value-added and eco-friendly transitions in the chemical industry, will include demand anchor corporations, small and mid-sized chemical corporations, academia and research institutions.