South Korea's Lotte Chemical, HD Hyundai to merge naphtha operations under petrochem plan
South Korea's Lotte Chemical plans to shut its naphtha cracking operation to merge with HD Hyundai as part of the country's push to restructure an oversupplied petrochemical sector, a news report said on Tuesday.
Lotte will merge its 1.1-MM tonne (t) naphtha cracking facilities and jointly operate HD Hyundai's plant with an output of 850,000 t under a plan to set up a joint venture, the Korea Economic Daily newspaper reported.
South Korea's 10 petrochemical companies have agreed to restructure their operations to resolve what the government has said was a "crisis" situation resulting from overcapacity in return for financial support.
Lotte Chemical and HD Hyundai could not be reached for comment after business hours on Tuesday.
The government has a plan to cut naphtha-cracking capacity by up to 3.7 metric MMtpy to resolve oversupply and improve profit margins by merging production or shutting smaller companies and has required companies to submit plans by year-end.
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