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Yeochun NCC’s Yeosu Second Industrial Complex (Photo courtesy of Yeochun NCC) |
[Alpha Biz= Kim Jisun] Yeochun NCC, a major petrochemical producer based in the Yeosu National Industrial Complex in South Jeolla Province, is accelerating its business restructuring by moving to permanently shut down its third naphtha cracking center (NCC) with an annual capacity of 470,000 tons, following an agreement on feedstock supply.
According to industry sources on December 14, Yeochun NCC’s joint shareholders—Hanwha Solutions and DL Chemical—have agreed to close the Yeosu-based third NCC plant, which has been temporarily suspended. The decision reflects the government’s firm stance on industry restructuring.
Minister of Trade, Industry and Energy Kim Jung-kwan recently emphasized that companies failing to submit self-led restructuring plans by the end of December would be excluded from government support, stressing that no deadline extensions would be granted.
The government and Korea Development Bank (KDB) have previously set conditions for Yeochun NCC’s restructuring, including the downsizing of the third plant, a KRW 300 billion debt-to-equity swap, and the renewal of feedstock supply contracts between Hanwha Solutions and DL Chemical.
If the shutdown proceeds, domestic ethylene production capacity will be reduced by a total of 1.57 million tons, including the 1.1 million-ton reduction already proposed by Lotte Chemical.
Earlier, Hanwha Solutions and DL Chemical completed external consulting and reached an agreement to renew feedstock supply contracts covering key NCC inputs such as ethylene and propylene. On November 25, the two shareholders also approved a combined KRW 300 billion capital increase, contributing KRW 150 billion each, to support Yeochun NCC’s restructuring efforts.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
