Communicator
Insights |
2025/06/20 03:16 PM
The merger centers on combining Lotte Chemical’s 1.1 million-ton ethylene facility with HD Hyundai Chemical’s 850,000-ton unit at Daesan—a joint venture already co-owned by both entities. This consolidation will unify control over naphtha cracking technologies and derivative production, including polyethylene, propylene, and aromatics. Critically, it leverages the Daesan complex’s proximity to Chinese markets while mitigating the cost disadvantages Korean players face against Middle Eastern and North American rivals. The Lotte-Hyundai initiative transcends bilateral cooperation—it signals a necessary evolution for Korea’s petrochemical industry. As China’s overcapacity persists, further consolidation is inevitable. The Korea Chemical Industry Association, supported by government and consulting reports, advocates reducing generic capacity by as much as 50%, particularly in hubs like Daesan and Yeosu where overlapping facilities are most concentrated. Legislative proposals now offer tax incentives for coordinated output cuts, and the government is expected to use a “carrot and stick” approach to accelerate reform, rewarding active participants in restructuring while withholding support from those that resist. |
News |
2025/05/22 08:26 PM
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