Korean petrochemical firms streamlining operations

By Nam Kwang-sik
SEOUL, Jan. 6 (Yonhap) -- South Korea's petrochemical makers are pushing to
downsize their business operations to contend with a sharp fall in demand amid a
global economic downturn, industry sources said Tuesday.
Local petrochemical companies, including LG Chem Ltd. and SK Chemicals Co., are
trying to streamline their operations and sell their subsidiaries to create
synergy, the sources said.
"A sharp fall in demand for petrochemicals in China has created hard times for
local firms since July," said Kim Jong-sung, an official at the Korea
Petrochemical Industry Association. "The deepening global economic downturn has
also had a negative impact on petrochemical firms."
LG Chem, the nation's leading chemical producer, decided last month to spin off
its industrial material division by the end of March this year. The decision is
subject to approval by shareholders at a meeting scheduled for Jan. 23.
In December, SK Chemical, the petrochemical unit of SK Group, sold its subsidiary
SK Petrochemical to SK Energy Co., another unit of the group, for 4.1 billion won
(US$3.1 million).
SK Chemical also sold its two polyurethane plants in South Korea and China to US
chemical company Lubrizol Corp.
DC Chemical Co., South Korea's leading polysilicon manufacturer, sold its 66.75
percent stake in U.S. based Columbian Chemicals Co. to One Equity Partners, a
private equity fund.
In addition, Honam Petrochemical Corp., a unit of the South Korean family-run
conglomerate Lotte Group, merged with its wholly owned unit Lotte Daesan
Petrochemical Corp. on Jan. 1.
In mid-November last year, several local petrochemical companies, including
Yeochun NCC Co., shut down their plants in Yeosu, 455 km south of Seoul, due to a
fall in demand for petrochemicals in China.
ksnam@yna.co.kr
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