South Korea Approves Petrochemical Restructuring Plan For Yeosu Complex

According to Yonhap, South Korea has approved a restructuring plan for petrochemical companies at the Yeosu industrial complex, marking the second such project under the government's effort to reform the sector during a prolonged downturn. The Ministry of Trade, Industry and Resources said Lotte Chemical Corp. will spin off its naphtha cracking center operations at the Yeosu petrochemical industrial complex and merge them with Yeochun NCC Co., while the combined entity will absorb core businesses from DL Chemical and Hanwha Solutions Corp., including polyethylene operations and Hanwha Solutions' PE and petroleum resin businesses. The ministry said the plan also calls for a shift toward higher-value products such as chemical materials for the medical and automotive industries. DL Chemical and Hanwha Solutions plan to inject a combined 800 billion won (US$576 million) to repay debt and finance restructuring, and the companies will receive more than 700 billion won in government support, including financial aid, tax incentives and regulatory relief. The government approved a similar plan for the Daesan petrochemical industrial complex in February and said it plans to start talks on restructuring the Ulsan petrochemical complex as soon as possible.