Industry officials said Wednesday the package is a positive step, but its scope and effectiveness will depend on how it is carried out. They pointed in particular to the inclusion of financing, calling it the biggest change. Companies have pursued self-help measures and cost cuts as conditions worsened, but new government funding had been virtually absent.
A petrochemical industry official said it was encouraging that relevant ministries worked together on a comprehensive package, adding that the support could speed up facility integration that had been delayed by funding burdens. The official said it will be important whether tailored support continues during the restructuring process based on each company’s circumstances.
Cho Nam-su, CEO of HD Hyundai Chemical, who attended a meeting hosted by the Ministry of Trade, Industry and Energy at KOTRA in Seoul, said, “I think the government has done its best,” and added, “Based on this support package, we will do our utmost to become a model case that does not disappoint the government.”
The industry also expects the approved consolidation of HD Hyundai and Lotte Chemical’s naphtha cracking center, or NCC, facilities in the Daesan complex to accelerate restructuring talks in Yeosu and Ulsan. Companies see the Daesan project’s conditions and support level as a potential benchmark for future negotiations.
Yeosu and Ulsan have not yet submitted final restructuring plans to the ministry. With more companies clustered there than in Daesan, coordinating interests over measures such as NCC output cuts has been difficult.
In Yeosu, options including shutting down the third plant of Yeocheon NCC, a joint venture between Hanwha Solutions and DL Chemical, and a shutdown at Lotte Chemical have been reviewed, but no conclusion has been reached. LG Chem and GS Caltex have agreed only to close aging facilities, while clashing over issues including the equity structure of their joint venture.
In Ulsan, SK Geo Centric, Daehan Oil & Chemical and S-OIL are discussing a restructuring plan, but have not narrowed differences over whether to include S-OIL’s Shaheen Project among targets for cuts.
By contrast, the industry voiced disappointment over electricity-cost relief. The government proposed using a “distributed special zone” system to apply power rates 4% to 5% cheaper than those of Korea Electric Power Corp., but critics said generation capacity and the scope of application are limited.
The Korea Chemical Industry Association said it “sincerely welcomes and appreciates,” on behalf of the industry, the swift approval of the first petrochemical restructuring project with active cooperation from government ministries and related agencies. But it said measures to ease the burden of industrial electricity rates were not sufficiently reflected in the Daesan package.
It added that, from the standpoint of industrial competitiveness, a broader review of the overall industrial electricity-rate system is needed.
* This article has been translated by AI.
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