Government Reviews Domestic Production Possibility of Urea Solution... Business Feasibility Remains Uncertain

On the afternoon of the 12th, a signboard selling urea solution installed at the entrance of a gas station in downtown Seoul amid the ongoing shortage of urea solution [Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kwon Haeyoung] As part of the mid- to long-term measures to address the shortage of urea solution caused by China’s export restrictions, the government is exploring the possibility of domestic production of urea. However, it is uncertain whether companies will engage in domestic urea production due to low profitability.

According to the Ministry of Trade, Industry and Energy on the 21st, such measures are currently under review.

Urea, the raw material for urea solution, is currently entirely dependent on imports. However, until the 2000s, there were multiple urea production plants in Korea. Due to the low-price competition from Chinese urea, domestic companies have exited the business, and currently, there are no urea producers in the country.

However, since profitability is low, the key issue is whether companies are willing to participate. Currently, Namhae Chemical imports urea and produces fertilizer based on it, while Lotte Fine Chemical, the successor of Samsung Fine Chemicals, produces urea solution using imported urea.

An official from the Ministry of Trade, Industry and Energy said regarding companies capable of producing urea domestically, "A large company that took over the business in the past might consider it," and added, "If there is (a company’s) intention, support measures should also be explored together." The industry believes that government-level support is necessary due to the low profitability.

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