Industry Minister Kim Jung-kwan urged petrochemical companies in Yeosu to quickly develop voluntary restructuring plans. He emphasized the importance of meeting the yearend deadline to qualify for government assistance addressing the industrywide crisis caused by global oversupply.
According to the Ministry of Trade, Industry, and Resources, Kim received a call while meeting with top officials from petrochemical companies in Yeosu, South Jeolla Province.
The government revealed its three principles in August to assist the struggling petrochemical industry, allowing local companies to create voluntary business restructuring plans by the end of the year.
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The principles involve the simultaneous restructuring of three key petrochemical industrial complexes located in Seosan, Ulsan, and Yeosu. Companies must make sufficient self-rescue efforts and develop a viable business restructuring plan.
The government will provide a comprehensive support package. From that point on, the petrochemical industry has committed to decreasing the capacity of naphtha cracking centers (NCCs) by a maximum of 3.7 million tons and transitioning to manufacturing high-value and environmentally-friendly products.
Lotte Chemical and HD Hyundai Chemical, located in the Daesan petrochemical complex in Seosan, South Chungcheong Province, have supposedly decided to reduce their NCC capacity by 1.1 million tons through voluntary restructuring.
Meanwhile, industrial complexes in Yeosu and Ulsan have not finalized their detailed plan yet.
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"If Daesan has opened the gate for business restructuring (of the petrochemical industry), Yeosu will determine the industry's fate," Kim says.
"The deadline for submitting business restructuring plans is the end of December as previously announced by the Ministry of Trade, Industry and Resources, and there are no plans to extend this deadline," he stresses.
"Companies that fail to meet this deadline will be excluded from government support and will have to navigate future domestic and international crises on their own."
Kim, while visiting LG Chem's plant in the Yeosu complex, encouraged the company to focus on investing in high-value specialty products, highlighting their strong research and development capabilities, as reported by the ministry.
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The petrochemical companies informed Kim that they were struggling with the increased electricity rates for industrial use and requested the enactment of a special bill to assist in obtaining appropriate visas for investment in the US.