RoydadNaft –  Struggling South Korean petrochemical companies submitted self-rescue plans to the government on Friday, ahead of a year-end deadline, as the industry faces persistent oversupply and weak profitability.

The proposals could significantly reshape major industrial complexes in Yeosu (South Jeolla Province) and Ulsan, with companies considering plant closures and potential mergers.

The submissions follow earlier filings from the Daesan complex in South Chungcheong Province last month, bringing the government closer to its goal of cutting up to 3.7 million metric tons of naphtha cracking center (NCC) capacity.

LG Chem submitted a restructuring plan for its Yeosu operations after consultations with GS Caltex, though details were not disclosed. Industry sources indicated the plan likely includes permanently shutting down LG Chem’s oldest facility in Yeosu, the No. 1 plant with an annual capacity of 1.2 million tons, which has been operating for about 30 years. There are also discussions about forming a joint venture to create an integrated operating structure.

GS Caltex stated it would continue talks with the government and LG Chem, saying: “In line with the government’s policy direction, we will work with LG Chem to create synergies that strengthen the competitiveness of the petrochemical industry.”

In the same Yeosu complex, Yeochun NCC submitted its plan jointly with Lotte Chemical. Sources suggest it includes the permanent closure of Yeochun NCC’s No. 3 plant (470,000 tons per year), which has been idle since late July, along with further capacity reductions. DL Chemical, a co-owner of Yeochun NCC, has previously advocated closing either the larger No. 1 (900,000 tons) or No. 2 (915,000 tons) plant, and broader integration options with Lotte Chemical remain under discussion.

In Ulsan, SK Geo Centric, S-Oil, and Korea Petrochemical Ind. jointly submitted a plan after engaging Boston Consulting Group for advice. The proposal focuses on establishing a joint venture to optimize downstream operations, with specific capacity cuts and plant decisions deferred to future talks, taking into account projects like S-Oil’s upcoming Shaheen facility.

The Ministry of Trade, Industry and Energy will meet Monday with CEOs from 10 major companies—including LG Chem, Lotte Chemical, HD Hyundai Chemical, and SK Geo Centric—to review the submissions and discuss potential government support.

The government directed petrochemical firms in August to submit restructuring plans by year-end.

An industry official noted that implementation will take time, saying: “The Daesan complex already had relatively concrete plans, but Yeosu and Ulsan faced tighter deadlines. It could take longer for individual restructuring plans to be detailed and carried out.”