Hyundai Oilbank "HPC Expects 80 Billion KRW Profit This Year... Annual Forecast 550 Billion KRW"

Q2 Earnings Conference Call

The decomposition furnace, a key facility of the Hyundai Chemical HPC project. Photo by Hyundai Oilbank

[Asia Economy Reporter Choi Dae-yeol] Hyundai Oilbank and Lotte Chemical joint venture Hyundai Chemical expects to generate around 80 billion KRW in profit this year through the heavy oil petrochemical cracking facility (HPC) scheduled to start operations in November. Unlike existing cracking facilities that primarily use naphtha as raw material, HPC can produce ethylene from various raw materials such as heavy oil and LPG.

On the 23rd, during the earnings conference call, Hyundai Oilbank stated, "The commercial operation schedule for the fourth quarter in November is proceeding without changes," adding, "Based on market conditions in 2019, we expected an annual operating profit of about 500 billion KRW, and about 550 billion KRW based on last year’s figures. We believe it is possible to exceed that amount with current conditions."

According to the company, as of the end of last month, construction progress was at 94%, with completion and commissioning planned for next month. The facility is capable of producing 850,000 tons of polyethylene and 500,000 tons of polypropylene annually.

In addition to flexible adaptation to raw material market conditions, the company plans to expand into high-profit, eco-friendly chemical and material sectors after commercial operation. The company has decided to produce 180,000 tons annually of ethylene vinyl acetate (EVA), used for solar cell protective films, after HPC starts operation. The price of this material has more than doubled compared to the second quarter of last year.

Furthermore, the company expects to start commercial operation of a newly built MTBE plant, used as a blending agent for adjusting gasoline octane ratings, from the fourth quarter of this year. Currently, MTBE is procured from external suppliers, but the new plant will enable self-supply. The company stated, "Compared to other expensive blending agents, MTBE has a higher octane rating and is relatively cheaper, making it economically advantageous," and expects to produce 200,000 tons annually, generating 31.2 billion KRW in profit.

Regarding the new business concept of blue hydrogen production, the company revealed it is developing carbon dioxide capture technology using membrane separation methods. They are researching a method to manufacture calcium carbonate using desulfurization gypsum and currently have pilot-scale production facilities for testing, according to a company representative.

Meanwhile, Hyundai Oilbank announced that its operating profit for the second quarter of this year was 265.7 billion KRW, an increase of 252.5 billion KRW compared to the same period last year. Compared to the previous quarter, which benefited from inventory effects, it decreased by 147.1 billion KRW. Sales for the second quarter were recorded at 4.944 trillion KRW.

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