Lotte and Hanwha Join Hands in Chemical Business

[Asia Economy Reporter Park So-yeon] Lotte Chemical and Hanwha General Chemical are joining hands to strengthen business competitiveness and revitalize the local economy.

According to related industries on the 15th, Lotte Chemical and Hanwha General Chemical announced that they signed a business agreement at The Plaza Hotel in Seoul on the same day regarding the supply of PTA (Purified Terephthalic Acid), an intermediate raw material for synthetic fibers and PET bottles.

Lotte Chemical agreed to receive an annual supply of 450,000 tons of PTA products through Hanwha General Chemical starting from July this year. Hanwha General Chemical plans to restart its idle Ulsan Plant No. 2 PTA production facility to supply the volume.

This agreement is significant as an example of voluntary cooperation between two competitors in the petrochemical industry to expand profitability and business competitiveness, showing a shared commitment to the development of the domestic chemical industry.

Starting from July this year, Lotte Chemical plans to halt operation of its 600,000-ton annual capacity PTA plant at the Ulsan Plant and strengthen its business competitiveness by converting the facility to produce PIA (Purified Isophthalic Acid).

PIA is a product used as a raw material for PET, coatings, and unsaturated resins. Lotte Chemical’s annual PIA production volume is 520,000 tons, holding the global market share No. 1. At the end of last year, it invested 50 billion KRW in the Ulsan Plant to establish facilities converting the PTA production line to PIA.

Hanwha General Chemical is expected to enhance its business competitiveness by securing a stable supply source through this supply contract. Having led the domestic PTA business for over 40 years, Hanwha General Chemical owns the largest domestic PTA production facility with an annual capacity of 2 million tons and has strengthened its competitiveness through continuous cost improvements despite oversupply caused by large-scale new expansions in China.

Lim Byung-yeon, Head of Basic Materials Business at Lotte Chemical, said, "In a rapidly changing industrial environment, competitive relationships can always turn into cooperative ones. We expect that flexible thinking and actions between the two companies will contribute not only to improving corporate competitiveness but also to revitalizing the local economy."

Lim Jong-hoon, CEO of Hanwha General Chemical, said, "This is a case where companies voluntarily came together to cooperate in response to the industrial crisis amid the global economic recession and COVID-19, which have depressed the petrochemical market. By overcoming the limitations of both companies through win-win cooperation, we will strengthen corporate competitiveness."

This content was produced with the assistance of AI translation services.