PwC: "Petrochemical Industry Needs Production Structure Redesign for Recovery"

Report Outlines Strategies for Structural Transformation of the Industry

It has been suggested that in order for the domestic petrochemical industry to recover, the entire industrial structure—including production—must be fundamentally redesigned.

PwC Consulting published a report titled "Charting the Next Course: Structural Transformation of the Petrochemical Industry" on May 12, 2026, containing these insights. PwC’s petrochemical specialist team conducted consulting on the establishment and operation of integrated joint ventures (JVs) for the Daesan (Lotte, Hyundai) and Yeosu (DL, Lotte, Hanwha) petrochemical industrial complexes. Based on this work, the firm made recommendations on restructuring the industry.

PwC stated that recent poor performance in the petrochemical sector cannot simply be attributed to cyclical market fluctuations. The firm explained that major changes in the supply structure in Asia have resulted from increased self-sufficiency in China and the expansion of low-cost processes in the Middle East, while the domestic industry’s reliance on existing production methods and product portfolios has heightened competitiveness challenges. The government also recognizes these as structural issues and is taking action, and PwC emphasized that discussions on integration in the private sector must accelerate in the same direction.

PwC particularly stressed that short-term production cuts or cost reductions alone have their limits, and a comprehensive structural overhaul of the industry is necessary. For example, the firm argued that production structure redesign and business portfolio transition should be pursued simultaneously. In the report, PwC stated, “By integrating facilities, normalizing the operating rate of NCC plants, and achieving cost competitiveness through joint procurement of feedstock and logistics and operational efficiency, the industry can improve its position.” The report also suggested moving away from a focus on commodity products and increasing the proportion of high value-added products, such as semiconductor and battery materials.

Jung Kyungin, petrochemical partner at PwC Consulting, stated, “This industry downturn is not an issue that will resolve itself with time, but rather a matter of structural transformation. How we redesign production and business structures will determine future competitiveness.” He added, “Integration must be pursued not merely for the sake of scale, but based on feasibility and sustainability.”

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