Azernews.Az

By Alimat Aliyeva

Lotte Chemical Corp. and HD Hyundai Chemical announced Wednesday that they have finalized a restructuring plan to reduce the capacity of their naphtha cracking centers (NCCs) in a major industrial complex in central South Korea. The initiative is part of a broader nationwide effort to reform and modernize the petrochemical sector, Azernews reports, citing Yonhap agency.

According to regulatory filings, the companies have submitted their voluntary restructuring plan for government approval, allowing them to join a state-led initiative aimed at streamlining three major petrochemical industrial hubs located in Seosan, Ulsan and Yeosu.

This marks the first corporate restructuring proposal since the government and petrochemical companies began discussions on the issue in August.

“In accordance with the Special Act on Corporate Revitalization, we jointly applied for government approval to implement revitalization measures and participate in the restructuring of the domestic petrochemical industry,” the companies said.

Under the plan, Lotte Chemical will spin off its NCC operations at the Daesan petrochemical complex in Seosan, located about 120 kilometers south of Seoul. The newly created entity will then be merged with HD Hyundai Chemical.

The companies expect the merger to enhance production consistency, improve operational stability, and strengthen the overall effectiveness of the restructuring plan. They also aim to boost the competitiveness of South Korea’s petrochemical industry by shifting toward a high-value-added and more eco-friendly business model.

The restructuring plan will move forward once it completes government review and approval. After that, the companies will prepare detailed operational roadmaps through additional consultations.

Earlier in the day, Industry Minister Kim Jung-kwan urged petrochemical firms to submit their voluntary restructuring plans quickly, warning that companies failing to meet the year-end deadline will not be eligible for government financial support.

Companies at the two remaining petrochemical complexes are reportedly preparing their own plans to join the nationwide initiative.

Interestingly, analysts say this restructuring wave reflects a global trend: as demand for traditional petrochemical products slows and environmental standards tighten, major industry players are being pushed to reinvent themselves—shifting investment from mass production to sustainable materials, advanced polymers, and low-carbon technologies.