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Hanwha, Lotte Groups Benefiting from Acquisition of Petrochemical Subsidiaries
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Hanwha, Lotte Groups Benefiting from Acquisition of Petrochemical Subsidiaries
  • By Jung Min-hee
  • February 1, 2017, 02:30
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The petrochemical companies the Samsung Group sold to Hanwha Group and Lotte Group for its business restructuring are showing excellent performances.
The petrochemical companies the Samsung Group sold to Hanwha Group and Lotte Group for its business restructuring are showing excellent performances.

 

It has been found that the petrochemical companies the Samsung Group sold to Hanwha Group and Lotte Group for its business restructuring are showing excellent performances in the current boom in the chemical industry.

Back in November 2014, the Hanwha Group acquired Samsung Total and Samsung General Chemical from Samsung and changed their names to Hanwha Total and Hanwha General Chemical. Last year, the two subsidiaries benefited much from stable international oil prices and favorable supply conditions in the global petrochemical market.

According to stock market experts, Hanwha Total’s operating profit for last year is estimated at a record high of 1.4 trillion won (US$1.19 billion), 76% more than a year ago. If so, Hanwha Total becomes the first subsidiary of the Hanwha Group that posts an annual operating profit of more than one trillion won. The acquisition was completed in May 2015 and its profitability has been on the rise since then along with the prices of its main business items such as paraxylene and styrene monomer.

Hanwha General Chemical’s operating profit for last year is estimated at approximately 250 billion won (US$212 million). This company produces purified terephthalic acid and the like as the parent company of Hanwha Total.

The petrochemical companies the Lotte Group acquired from Samsung for 3 trillion won (US$2.55 billion) in 2015 are doing well, too. For example, Lotte Advanced Materials, which had been the chemical division of Samsung SDI, is estimated to have recorded a profit of more than 300 billion won (US$255 million) last year. The company’s sales and operating profit were 1.962 trillion won (US$1.66 billion) and 268.8 billion won (US$228 million) until the end of the third quarter of 2016, respectively. Lotte Fine Chemical’s operating profit for 2016 is estimated at 25 billion won (US$21 million) or so and that for this year is expected to reach 50 billion won (US$42.5 million). Lotte Chemical’s annual sales exceeded 15 trillion won (12.7 billion) last year after its acquisition of Lotte Advanced Materials and Lotte Fine Chemical and Lotte Chemical is now competing with LG Chem for the top spot in the domestic chemical industry.