Petrochemical, Steel Restructuring

The Korean government will finish reorganizing the petrochemical and steel sectors by 1st half of next year.
The Korean government will finish reorganizing the petrochemical and steel sectors by 1st half of next year.

 

The government made a plan to finish reorganizing business regarding terephthalic acid (TPA) and polystyrene (PS) picked as glut items in the petrochemical industry. In the case of steel industry, the government will push ahead with a cut in or the integration of facilities to produce steel plates and iron pipes.

The Ministry of Industry, Trade and Resources and related government organizations discussed measures to boost the competitiveness of the nation’s steel and petrochemical industries in the third Industrial Restructuring Meeting by Subdivisions presided with by Joo Hyung-hwan, the minister of industry, trade and resources. The meeting was held to adjust details of an industrial competitiveness increasing measure based on consulting results to be announced by the government on September 30. The steel and petrochemical industries gave foreign consulting firms work to produce restructuring measure reports. The government has prepared measures to boost sectoral industrial competitiveness based on the reports.

Apart from TPS and PS, the government pointed its finger at four items including butadiene rubber and styrene-butadiene rubber (BR and SBR) which are materials for tires and polyvinyl chloride (PVC) which goes into production of pipes as glut items.

In particular, TPA, a material for PET bottles and PS, a material for low-priced plastics used in toys were classified into items whose production facilities need adjusting within a short period. “Only five years ago, TPA was a major export item whose export volume reached US$ 4.5 billion annually,” said minister Joo. “But now, the item requires business organization such as quick facility integration.”   

It was diagnosed that the steel industry will not avoid facility adjustments and reductions. In particular, steel plates and iron pipes were selected as items for business reorganization. The government is planning to adjust steel plate production facilities such as a reduction in them and the sale-off of them in addition to the current production suspension. With respect to iron pipes, the government will induce business reorganization in a manner to fully integrate facilities of marginal firms with companies with competitiveness at the center.

As imported iron bars and section steel threatened to steal market shares from domestically produced ones in the domestic market, the government decided to make steel production facilities eco-friendly and cut costs through IT.    

The government will finish reorganizing the petrochemical and steel sectors by 1st half of next year. “A large number of companies expressed their will to reorganize their business through the Special Act to Raise Corporate Vitality,” said Doh Kyung-hwan, head of the Industrial Infrastructure Office at the Ministry of Industry, Trade and Resources. “Self-restructuring in the petrochemical and steel industries will accelerate.”

 

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