Restructuring of Petrochemical Industry Begins... Reduction of NCC by up to 3.7 Million Tons

[Financial News] The government and the petrochemical industry have officially started large-scale restructuring. Companies have agreed to prepare a business restructuring plan by the end of the year, focusing on reducing naphtha cracking facilities (NCC) by 2.7 to 3.7 million tons and transitioning to high-value-added and eco-friendly products. The government plans to provide customized support packages for each company, encompassing finance, taxation, and research and development (R&D), under the principle of 'self-help first, government support later'.
 On the 20th, the Ministry of Trade, Industry and Energy announced that this agreement was reached at the business restructuring self-agreement ceremony for the revitalization of the petrochemical industry held at the Korea Chamber of Commerce and Industry in Seoul.
 In this agreement, the petrochemical industry plans to reflect the results of industry self-consulting and strive to reduce NCC by 2.7 to 3.7 million tons, transition to high-value-added and eco-friendly products, and minimize the impact on the local economy. The reduction scale of NCC is 18 to 25% of the total production.
 At the meeting of ministers related to strengthening industrial competitiveness held on this day, the government's principles for promoting restructuring were confirmed. Through the meeting, the government presented the 'three directions for restructuring': reducing excess facilities and transitioning to specialty products, securing financial soundness, and minimizing the impact on the local economy and employment.
 Additionally, the 'three principles of government support' were confirmed: simultaneous promotion of three petrochemical industrial complexes, preparation of sufficient self-help efforts and feasible business restructuring plans, and preparation of comprehensive government support packages.
 Deputy Prime Minister and Minister of Strategy and Finance Koo Yun-cheol emphasized, "With a complacent mindset of just enduring or avoiding the storm, the current crisis cannot be overcome, and we must face it with a determination of life and death." He further urged, "Even if not by the end of the year, plans to strengthen competitiveness should be presented promptly, even by next month."
 The government plans to provide customized support tailored to each company's situation after comprehensively reviewing the feasibility and self-help efforts of the business restructuring plans that the industry will submit by the end of the year.
 A representative from the Ministry of Industry explained, "Since each company has different circumstances and different approaches to business restructuring, uniform support is not considered appropriate."
 Efforts to mitigate the impact on the local economy and employment will also be pursued concurrently. Following the designation of Yeosu City, Jeollanam-do as an 'industrial crisis preemptive response area' last May, the Ministry of Industry is also considering additional designation for Seosan City, Chungcheongnam-do. 
 Minister of Industry Kim Jung-gwan warned, "We will firmly respond to free-riding companies that only seek to benefit from the facility reductions of other companies."
aber@fnnews.com Park Ji-young, Lee Bo-mi reporters