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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Seoul, Korea – Alpha Biz – Yeocho NCC, which has been struggling with financial difficulties, has narrowly avoided bankruptcy. However, the company continues to face challenges as LG Chem announces the dismantling of production facilities at two of its plants.
On the 12th, sources from the petrochemical industry revealed that LG Chem will dismantle its high-absorbent resin (SAP) production facility at the Gimcheon plant, which has an annual production capacity of 90,000 tons.
The decision is attributed to declining cost competitiveness due to aging facilities and increasing competition. Additionally, LG Chem will relocate the 20,000-ton styrene acrylate latex (SAL) production facility from its Naju plant to its Daesan plant in South Chungcheong, citing the need for "petrochemical business efficiency improvements."
The domestic petrochemical industry continues to struggle under the weight of oversupply from China and sluggish demand due to the economic downturn. Companies are responding to the crisis in various ways, including halting plant operations, dismantling facilities, and selling off assets.
Yeocho NCC, which faced a bankruptcy risk, recently suspended operations at its Yeosu Plant No. 3. Similarly, Lotte Chemical halted three lines at its Yeosu Plant No. 2 in December of last year.
Amid these ongoing losses in the petrochemical industry, there is growing urgency for swift restructuring and government-level intervention. Even the major players in the domestic petrochemical sector, known as the "Big 4" (LG Chem, Lotte Chemical, Hanwha Solutions, and Kumho Petrochemical), have reported significant operating losses of nearly 500 billion KRW in the first half of this year, highlighting the dire situation facing the industry.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
