Market Diversification
Korean petrochemical companies are focusing on market diversification from China to the Philippines, Australia, Malaysia, Indonesia, Russia, and Europe, based on the recognition that China is no longer a major client but a potential competitor.
Australia has continued to shut down refineries since 2013 and facilities equivalent to 30 percent of its production capacity were removed in 2014 alone. In other words, the country is turning itself into a petroleum importer, and Korean companies are trying not to miss out on the opportunity. They exported 4.751 million barrels to Australia in January this year, to record a 169 percent increase from a year ago. In addition, the export volume amounted to 4.879 million barrels in December last year. At present, Australia is one of the four main export destinations along with China, Japan, and Singapore.
In the meantime, their petroleum product exports to the Philippines soared from 9.8 million barrels to 15.15 million between 2011 and 2013. Also, the amount is estimated to be at 11.99 million barrels for the first half of last year. SK increased its export to the Philippines from 660,000 barrels or so to over 6 million barrels between 2012 and last year by making the most of its idle facilities in Korea, to meet the requests for small quantities of a wide variety of products specific to the country.
GS Caltex is concentrating on the Russian and European markets. It built a composite resin production plant with an annual capacity of 30,000 tons in the Czech Republic three years ago, while expanding its lubricant business in Russia. S-Oil recently launched high-quality lubricants in Thailand, Cambodia, Mongolia, and Myanmar, too.