HD Hyundai and Lotte Chemical Integrated Entity Named ‘H&L ADVANCED’

According to the petrochemical sector on July 28, HD Hyundai Chemical and Lotte Chemical have decided on ‘H&L cutting-edge’ as the name of the new integrated corporation to the Daesan workplace. As it is an equal joint venture structure in which HD Hyundai Oilbank and Lotte Chemical each hold a 50% stake, the English initials ‘H’ and ‘L’ symbolizing both companies were placed side by side. To this, ‘cutting-edge’ was combined to reflect the common direction of both companies, which is the advancement of business centered on high-value and eco-friendly items. HD Hyundai Chemical already completed the trademark consumption to the new corporation’s name last month.

The creation of an office space to the launch of the new corporation is also in full swing. Interior construction is underway to HD Hyundai Chemical to move into the 24th and 27th floors of the Military Mutual Aid Association Building located in Dogok-dong, Gangnam-gu, Seoul. The construction period is from June 20 to August 31, which is exactly one day before the launch of the new corporation. It appears that the office space creation work has also entered its final stages in line with the launch schedule on Sept. 1.

H&L cutting-edge is the integrated corporation of the ‘Daesan No. 1 Project,’ which was promoted in accordance with the petrochemical sector structural reform roadmap announced by the government in August of last year. As the sector downturn became prolonged due to oversupply from China and sluggish global demand, the government has been inducing facility integration and production capacity reduction between companies, and Daesan No. 1 is the first approved business restructuring case resulting from this policy.

The core of the business restructuring is to split Lotte Chemical’s Daesan workplace and then merge it with HD Hyundai Chemical to integrally operate the Naphtha Cracking Center (NCC) and downstream facilities. In this process, the operation of Lotte Chemical’s NCC, which has an annual production capacity of 1.1 million tons, will be suspended, and overlapping and deficit-ridden facilities among the general-purpose downstream facilities of both companies will also be reduced.

The launch of H&L cutting-edge is meaningful in that it goes beyond facility reduction and shifts the fundamentals of the domestic petrochemical sector from a focus on general-purpose items to high-value and eco-friendly substitutes. True to its new name, the integrated corporation plans to expand the production of high-value items such as highly elastic lightweight materials utilized in wires and cables, as well as organic solvents to electrolytes, which are core materials determining the charging and discharging performance of secondary batteries. It also promotes the introduction of eco-friendly and low-carbon raw materials such as bio-naphtha and ethane.

In measure with the Daesan No. 1 Project, the government has also prepared a customized support package of 2.1 trillion won (about $1.42 billion) or greater, covering finance, taxation, and licensing. In the case of financial support of up to 2 trillion won, up to 1 trillion won in new funds will be provided, and existing loans can also be converted into perpetual bonds up to 1 trillion won. Along with this, up to 115 billion won or greater will be provided to alleviate the cost burden of electricity, heat, liquefied natural gaseous (LNG), and raw materials, and 26 billion won or greater will be invested in methodology research to the transition to high-value and eco-friendly items.

An official from both companies said, “It is true that we have confirmed the name of the new integrated corporation as ‘H&L cutting-edge’,” and added, “We are proceeding with subsequent procedures without any setbacks.”