Jeollanam-do Considers Applying for Special Industrial Crisis Response Zone for Yeosu Petrochemical Complex

Raw Material Supply Instability and Intensifying Crisis Due to Middle East Unrest

Jeonnam Provincial Government Office, Exterior View

Jeollanam-do announced that it is considering applying for designation as a "Special Industrial Crisis Response Zone" in order to address the crisis facing the Yeosu National Industrial Complex for Petrochemicals, which has been triggered by the situation in the Middle East.

The petrochemical industry is facing multiple challenges, including a global supply glut, declining profitability, and strengthened carbon regulations. Recently, the unrest in the Middle East has caused instability in the supply of raw materials such as crude oil and naphtha, and the resulting price increases are further worsening the overall business environment for the industry.

The operating rates of major companies' factories in the Jeollanam-do region remain at 50–60%, below the break-even point. If disruptions in the supply of raw materials persist, there are concerns that this could lead to factory shutdowns and have a broad impact on the regional economy.

In response, Jeollanam-do is reviewing the application for designation as a Special Industrial Crisis Response Zone so that the region can receive government and tax support.

If designated as a Special Industrial Crisis Response Zone, a variety of national-level support measures can be provided, including support for employment stability and business operations.

First, support will be provided to maintain employment and stabilize workers' livelihoods. The cap and support ratio for employment retention subsidies will be raised, and emergency livelihood support and reemployment training for the unemployed and those on unpaid leave will also be strengthened.

Tax reductions and financial support will also be available. Companies located in the industrial complex will be eligible for reductions in corporate tax, income tax, acquisition tax, and property tax. In addition, financial support such as emergency management stabilization loans for partner companies and extensions of loan maturities will be pursued.

At the same time, support will be provided to help revitalize local commercial districts and expand the industrial base. Stabilization funds for small businesses in the region will be provided, and national infrastructure projects for fostering new industries and revitalizing the local economy will also be possible.

Jeollanam-do plans to use this review as an opportunity not only to respond to the crisis in the petrochemical industry, but also to drive a structural shift toward eco-friendly and high value-added industries.

Kim Kihong, Director of Strategic Industries at Jeollanam-do, said, "We are reviewing the need for designation as a Special Industrial Crisis Response Zone because the business environment for the petrochemical industry has deteriorated due to the situation in the Middle East," adding, "We will work with the government to address the regional industrial crisis and strengthen industrial competitiveness."

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