Forum held on restructuring of petrochemical industry

Han Moon-sun, chairman of the Yeosu Chamber of Commerce and Industry (far left), discusses key business issues with executives of industrial complex tenants at a petrochemical restructuring forum Monday. [Photo by Yeosu Chamber of Commerce and Industry]
Han Moon-sun, chairman of the Yeosu Chamber of Commerce and Industry (far left), discusses key business issues with executives of industrial complex tenants at a petrochemical restructuring forum Monday. [Photo by Yeosu Chamber of Commerce and Industry]

As production cuts are pursued in the naphtha cracking center (NCC) sector amid a supply glut, companies handling downstream processes — including engineering plastics and synthetic rubber — have raised concerns about potential raw material shortages.

The Yeosu Chamber of Commerce and Industry organized a forum Monday at its offices to discuss ways to support businesses affected by reductions in naphtha cracking capacity.

Industry representatives called for a phased shutdown schedule for YNCC (Yeocheon NCC) to give downstream operators adequate preparation time, and urged stable supplies of raw materials including C4 and C5 fractions and BTX (benzene, toluene and xylene).

Participants also raised the possibility that, depending on the scale of the cuts, rising logistics and raw material costs from greater reliance on imported feedstocks could further erode price competitiveness against Chinese rivals.

Korea BASF, which sources benzene and high-purity toluene from YNCC, urged caution, warning that closure of a second plant would force it to rely entirely on imports for high-purity toluene, creating cost and supply uncertainties.

Attendees also proposed nurturing alternative industries — including semiconductor materials, specialty gases, hydrogen and carbon capture, utilization and storage facilities — in preparation for companies moving into the southwestern semiconductor cluster. They further called for expanding the shared pipeline rack at the Yeosu National Industrial Complex and reviewing ways to ease the additional burden of industrial electricity rates in areas designated as industrial crisis zones.

Ahn Do-geol, chairman of the Democratic Party's combined South Jeolla Province-Gwangju special city chapter and a recognized voice on economic affairs within the party, said utilities go beyond individual company facilities and serve as shared industrial infrastructure used jointly by multiple firms within the complex. "The government and companies need to work together to find ways to preserve the existing utility network as much as possible, even as NCC capacity is reduced," he said.

A Ministry of Trade, Industry and Energy official at the forum said delaying the shutdown could reduce the cost savings agreed upon with Korea Development Bank and other creditors during YNCC's restructuring process. "However, we will conduct a comprehensive review that also takes into account supply chain issues and the impact on downstream operations," the official said.

Han Moon-sun, chairman of the Yeosu Chamber of Commerce and Industry, stressed that expanding shared infrastructure such as pipeline racks is essential to ensuring stable supplies of raw materials and utilities among industrial complex firms even after the NCC restructuring. "The shared pipeline rack at the Yeosu National Industrial Complex has reached saturation, making it difficult to install additional pipelines, and there is a pressing need for improvement from a safety management standpoint as well," Han said.

Participants agreed that the Ministry of Trade, Industry and Energy, the Korea Industrial Complex Corporation and local governments should conduct further feasibility reviews based on the relevant materials.

The forum was attended by Democratic Party chapter chairman Ahn Do-geol; lawmakers Ju Cheol-hyeon, Jo Gye-won and Gwon Hyang-yeop representing the Yeosu, Suncheon and Gwangyang constituencies; Ministry of Trade, Industry and Energy officials Kim Geon-hyeok and Wi Seung-bok; Yeosu Mayor Seo Yeong-hak and relevant city departments; executives from petrochemical firms in the Yeosu industrial complex; and the South Jeolla branch of the Korea Industrial Complex Corporation.


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