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Hans India
5 hours ago
- Business
- Hans India
South Korean govt to unveil measures to restructure petrochemical industry
The South Korean government is set to announce policy measures to restructure the struggling petrochemical industry, which has been hit hard by a global oversupply, officials said Sunday. The Ministry of Trade, Industry and Energy is preparing inter-ministry measures to encourage companies to adjust their business portfolios while offering financial and tax support to help them carry out restructuring in a timely manner, Yonhap News Agency reported, citing officials. The local petrochemical industry has been in a prolonged slump in recent years amid sluggish demand and an oversupply caused by massive facility expansions in China and Middle Eastern countries. Recently, Yeochun NCC Co., a joint venture between Hanwha Group and DL Group, faced a liquidity crisis that forced its shareholders to provide emergency loans. A recent report by Boston Consulting Group warned that if the current downturn persists, nearly half of South Korean petrochemical firms may not survive the next three years, given their weak financial health. The government's upcoming measures will include legal, administrative and financial incentives to support companies pursuing restructuring. If companies decide to readjust their business portfolios or pursue mergers and acquisitions (M&As), the government plans to provide full administrative and financial assistance. In recent weeks, the government has held consultations with leaders of major petrochemical companies to collect their restructuring plans. Earlier, the industry ministry suggested various options, such as facility shutdowns, asset sales, joint ventures and M&As, as possible restructuring strategies. LG Chem recently suspended operations at its styrene monomer facilities in Yeosu, some 320 km south of Seoul, and Daesan, 85 km southwest of the capital, and decided to halt alcohol production at its plant in the southwestern city of Naju. Lotte Chemical Corp. and HD Hyundai Oilbank Co. are also reportedly in talks to merge their respective naphtha cracking centre (NCC) assets in Daesan. "We are keenly aware of the challenges facing the petrochemical industry," Industry Minister Kim Jung-kwan said during a recent field visit. "The industry must work together to pursue voluntary restructuring efforts, such as facility adjustments."
New Straits Times
4 days ago
- Business
- New Straits Times
South Korea to announce plan to restructure petrochemical sector facing 'grave' situation
SEOUL/NEW DELHI: South Korea's government will announce a plan this month to restructure the country's petrochemical sector, which is in a "grave" situation, Industry Minister Kim Jung-kwan said on Thursday. South Korean petrochemical companies must take lessons from the restructuring of the country's shipbuilding industry in the late 2010s, when shipmakers had to liquidate assets and streamline business areas amid a sharp drop in orders, Kim said. Margins have plunged for petrochemical companies in South Korea and across the globe due to an oversupply of products caused by relentless capacity additions in the last decade, particularly in China, the biggest petrochemical market. Demand has also been sluggish over the last three to four years. "A restructuring in the petrochem industry has been highly expected, given the industry is running merely 80 per cent of total capacity in Korea now - meaning we have about a 20 per cent glut here," said Hwang Kyu-won, an analyst at Yuanta Securities Korea. Kim, who was speaking at a shipyard, said the petrochemical industry needed to take voluntary measures, including the "adjustment" of facilities, his ministry quoted him as saying. There have been concerns as well over the financial health of South Korea's loss-making Yeochun NCC Co (YNCC), a Yeosu-based petrochemical maker that local media says faces 180 billion won (US$130 million) in loans coming due at the end of August. South Korea's government can use YNCC's travails as an opportunity for a large-scale restructuring in the industry, said the analyst Hwang. Analysts say the industry does not expect global petrochemical margins to recover before 2027. The last major restructuring for South Korea's petrochemical industry was in 1999 during the Asian Financial Crisis, when YNCC was formed. President Lee Jae Myung, who took office after a snap election in June, pledged during his campaign to pursue tax support for mergers and acquisitions in the petrochemical industry, and to exempt companies from antitrust regulations to allow more coordination of production and operations. South Korea's exports of petrochemical products stood at US$21.7 billion in the first half of this year, down 11.1 per cent from a year earlier, amid price declines and global oversupply. Total exports of petrochemical products were US$48 billion in 2024, accounting for 7 per cent of South Korea's total exports and a top-five export item after semiconductors, automobiles, machinery and petroleum products. South Korea is one of the world's largest importers of naphtha, a derivative of crude oil that is refined into chemical products used in plastics for automobiles, electronics, clothing and construction. If the country is forced to cut capacity, it could impact global oil markets. Other South Korean petrochemical companies besides YNCC are also seeing asset reshuffling. HD Hyundai is looking to acquire Lotte Chemical's naphtha cracker, or the companies may merge their cracker operations, trade sources have said. HD Hyundai said nothing has been decided yet.
Korea Herald
4 days ago
- Business
- Korea Herald
S. Korea to launch consultative body to support MASGA project: industry minister
The South Korean government will launch a consultative body of relevant ministries to support the shipbuilding cooperation initiative with the United States, the industry minister said Thursday, noting the project will create new opportunities for the Korean shipbuilding industry. Industry Minister Kim Jung-kwan unveiled the plan during the naming ceremony of two liquefied natural gas carriers to be delivered to the US by Korean shipbuilding giant Hanwha Ocean Co., held at the company's shipyard in Geoje, about 330 kilometers southeast of Seoul, according to the Ministry of Trade, Industry and Energy. "The government will swiftly form a consultative body comprising relevant agencies to support the Make American Shipbuilding Great Again project, while closely communicating with the US side to create tangible results," he said. MASGA refers to South Korea's proposal for bilateral shipbuilding cooperation with the US made during its tariff negotiations with the Donald Trump administration. Late last month, the Seoul government struck a trade deal with the Trump administration by pledging to invest $150 billion in the MASGA project and another $200 billion for bilateral cooperation in strategic industries, such as semiconductors, batteries and biotech. "MASGA is a win-win project that supports the revitalization of the US shipbuilding industry by facilitating investment in American shipyards, while helping them nurture a skilled workforce and rebuild supply chains," Kim added, according to the industry ministry. "The project will also create new opportunities for our companies to enter new markets." The ministry said Hanwha Ocean's recently constructed LNG carriers are the first two out of five vessels to be delivered to the US for the latter's LNG exports. Hanwha won the order, worth $1.2 billion, in 2022. The deal reaffirms the top-tier competitiveness of Korean shipbuilders in the high-value LNG carrier market, the ministry said, noting that more than 70 percent of 760 LNG carriers currently operating worldwide have been built by Korean shipbuilders. Notably, in the first half of this year, Korean companies secured 100 percent of global LNG carrier orders, the ministry highlighted. Following the naming ceremony, the industry minister also met with Hanwha Ocean officials and the crew members of US Navy vessel Charles Drew at the Geoje shipyard. Hanwha Ocean is currently providing maintenance, repair and overhaul services for Charles Drew, which is the third US naval vessel to undergo MRO at the Hanwha shipyard. "The US naval vessel MRO project represents the starting point of Korea-US shipbuilding cooperation, and just like the previous two MRO projects, we hope Charles Drew will be reborn as a new ship through the advanced capabilities of Korean shipbuilding," Kim said. In August last year, Hanwha secured an MRO contract for the US Navy's logistics support ship Wally Schirra, marking the first such deal for a Korean shipbuilder. In November, it also won an MRO deal for the replenishment oiler Yukon. (Yonhap)
TimesLIVE
06-08-2025
- Automotive
- TimesLIVE
South Korea says timeline for US car tariff cut uncertain
South Korea's industry minister Kim Jung-kwan said on Wednesday Seoul needs to hold further discussions with Washington on the timing of the promised tariff cuts on the country's car exports to the US from the 25% level. President Donald Trump said last week the US will charge a 15% tariff on imports from South Korea, including cars, as part of a deal that eases tensions with a top-10 trading partner and key Asian ally. The 15% US tariffs on most items coming from South Korea are due to take effect from Thursday. South Korean carmakers such as Hyundai Motor and Kia want the tariff cut brought in swiftly to create a level playing field with Japanese and European rivals. Separately, Japan's top tariff negotiator Ryosei Akazawa said he would head to Washington this week to press Trump to sign an executive order to bring the cut to tariffs on Japanese car imports into effect. In the technology sector, Kim said the countries had agreed to continue talks on online platform legislation to make sure US tech companies were not unfairly treated compared with domestic firms. "Though the digital issue was not included in the latest agreement, there are major concerns about it among the US government, parliament and businesses," he said at a parliamentary session. The minister reiterated there had been no agreement on the opening of the agriculture market, including beef, rice, fruit and other farm good, as part of the deal. He said the countries will increase cooperation in the quarantine process for fruit and vegetables, which has been cited by Washington as one of the non-tariff barriers US farmers face. South Korean finance minister Koo Yun-cheol said at a separate parliamentary session the US viewed the quarantine process for fruit and vegetables as too slow and asked Seoul to introduce a rational and scientific process.
The Sun
06-08-2025
- Automotive
- The Sun
South Korea seeks clarity on US auto tariff cut timing
SEOUL: South Korea's Industry Minister Kim Jung-kwan stated on Wednesday that additional discussions with Washington are necessary to finalize the timing of promised tariff cuts on the country's auto exports to the US, currently set at 25%. President Donald Trump announced last week that the US would impose a 15% tariff on imports from South Korea, including automobiles, as part of a broader agreement aimed at easing trade tensions. The reduced tariffs are scheduled to take effect starting Thursday. South Korean automakers, including Hyundai Motor and Kia, are urging swift implementation of the tariff reduction to ensure fair competition with Japanese and European rivals. Meanwhile, Japan's chief tariff negotiator, Ryosei Akazawa, is set to visit Washington this week to push for an executive order to lower tariffs on Japanese auto imports. In the technology sector, Minister Kim confirmed ongoing discussions regarding online platform legislation to prevent unfair treatment of US tech firms compared to domestic companies. 'While digital issues were not part of the latest agreement, they remain a significant concern for the US government, Congress, and businesses,' he said during a parliamentary session. Kim also clarified that no agreement had been reached on opening South Korea's agricultural market, covering products such as beef, rice, and fruit. However, both nations agreed to enhance cooperation in quarantine procedures for fruits and vegetables, which the US has identified as a non-tariff barrier affecting American farmers. Finance Minister Koo Yun-cheol noted that the US has criticized South Korea's quarantine process as overly slow and requested a more streamlined, science-based approach. - Reuters
