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Lotte Chemical, HD Hyundai seek to combine naphtha cracking facilities
- Entity
- LOTTE Chemical Corporation
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News Message
South Korea’s leading petrochemical firms are reeling from Chinese oversupply amid an industry slump.
Image: Lotte Website
Lotte Chemical Corp. and HD Hyundai Co. are in talks to consolidate their naphtha cracking operations in South Korea’s Daesan petrochemical complex – marking the first significant self-initiated restructuring move among domestic players facing intense pressure from Chinese oversupply.
According to multiple investment banking sources familiar with the matter on Wednesday, the two companies began negotiations to merge their respective naphtha cracking center (NCC) assets in Daesan, South Chungcheong Province.
The companies are currently working with a major accounting firm to assess the value of the assets and determine the fair value of a prospective joint venture, sources said.
The Lotte-HD Hyundai negotiations began earlier this year, following failed attempts by Lotte Chemical to explore similar consolidation efforts with other domestic producers such as LG Chem Ltd. and DL Chemical Co.
