![An aerial view of Lotte Chemical's Yeosu factory. [Photo provided by Lotte Chemical]](https://wimg.heraldcorp.com/news/cms/2026/08/04/news-p.v1.20260327.aa2ddc188c9e4cb590ef1b4fdabc09c5_P1.png)
Lotte Chemical is accelerating its restructuring drive, dissolving what had been the South Korean petrochemical industry's first sales subsidiary on the African continent. The company is expected to press ahead with liquidating and divesting non-core units while speeding its pivot to higher-value businesses as the prolonged petrochemical market downturn shows no sign of easing.
Industry sources said Tuesday that Lotte Chemical recently convened a board meeting and decided to wind down its African sales unit, LC Nigeria — eight years after the subsidiary was founded.
Established in Nigeria in 2018, LC Nigeria was the first African sales subsidiary set up by a South Korean petrochemical company. It sold commodity petrochemical products — including polyethylene and polypropylene — across African markets. Lotte Chemical created the unit to reduce its heavy reliance on China for sales and tap into Africa's high-growth potential.
The dissolution is part of Lotte Chemical's broader restructuring effort. With a China-driven supply glut continuing to weigh on the industry, the company is cutting costs and narrowing losses by winding down non-core affiliates and overseas units. Over the five years from 2021 through 2025, Lotte Chemical liquidated or divested 23 subsidiaries and foreign entities.
Lotte Chemical is also actively participating in the government-led petrochemical industry overhaul, adding further momentum to its restructuring. The Yeosu Project No. 1 — submitted jointly in March with Hanwha Solutions and DL Chemical, the major shareholders of Yeochun NCC — received government approval late last month. The project calls for shutting down Yeochun NCC's No. 2 and No. 3 plants and merging the remaining No. 1 plant with Lotte Chemical's Yeosu factory to form an integrated entity.
Lotte Chemical is also pursuing the Daesan Project with HD Hyundai. That project centers on shutting down a naphtha cracking center with an annual capacity of roughly 1.1 million tons as HD Hyundai Chemical absorbs Lotte Daesan Petrochemical through a merger. The combined entity is set to launch next month.
Lotte Chemical's restructuring is expected to continue. The timeline for resolving China's supply glut remains highly uncertain, and industry observers expect China to keep expanding capacity for basic petrochemical products through at least 2028.
In parallel, the company plans to increase the share of high-value businesses — mass-producing products that China has struggled to develop — to build a more stable earnings base.
Lotte Engineering Plastics, a Lotte Chemical subsidiary, plans to complete its Yulchon factory — the largest compounding plant in South Korea — in the second half of this year. Compounding involves blending base petrochemical products with various additives in optimized combinations to enhance performance. The Yulchon factory, with an annual production capacity of 500,000 tons, will also mass-produce engineering plastics used in robot materials and other applications.
Another subsidiary, Lotte Energy Materials, is focused on expanding production capacity for AI circuit foil — the copper foil used to make circuit boards — as demand surges. To that end, the company plans to invest 50 billion won ($35 million) to scale up its Iksan factory's capacity from the current 3,700 tons to 16,000 tons by next year.
yeongdai@heraldcorp.com
