H&L Advanced, a joint venture that marks the first outcome of a business restructuring drive aimed at strengthening the competitiveness of South Korea's petrochemical industry, has officially launched.
H&L Advanced held a launch ceremony at the Daesan plant in Seosan, Chungcheongnam Province, on the 4th and began full-scale operations.
About 180 executives and employees attended the event, including H&L Advanced Chief Executive Cho Nam-soo, Lotte Group Chemical Business Unit Head Lee Yong-jun and HD Hyundai Oilbank Chief Executive Song Myung-jun.
H&L Advanced is the product of "Daesan No. 1," a business restructuring project launched to overcome the structural crisis facing the domestic petrochemical industry and improve its competitiveness. The company name combines the identities of the two joint venture partners, HD Hyundai Chemical (H) and Lotte Chemical (011170) (L), with "Advanced" signifying sustainable growth through change and innovation. Each company holds a 50% stake.
H&L Advanced plans to link the strengths of its refining and petrochemical operations to optimize the entire process from feedstock procurement to product manufacturing. Based on this, the company aims to raise production efficiency, strengthen cost competitiveness and maximize operational synergies.
Business restructuring will also accelerate. Under the restructuring plan approved by the government, Lotte Chemical will shut down a naphtha cracking center (NCC) with annual capacity of 1.1 million tons over the next three years and scale back operations at low-margin commodity facilities. Instead, the company will expand its business portfolio over the medium to long term around specialty materials and eco-friendly products. The strategy is to upgrade the business structure of commodity petrochemical products and secure a foundation for future growth.
"We expect H&L Advanced to bring together the capabilities and experience the two companies have accumulated and grow into a company with an agile organization and strong competitiveness," Chief Executive Song said at the ceremony. "We hope it becomes a starting point that opens new possibilities for South Korea's petrochemical industry."
"Lotte and HD Hyundai have chosen the path of integration to secure the competitiveness of the Daesan business, based on the trust and cooperation built through joint venture operations over the years," Lee said. "We expect the capabilities of the two companies to combine effectively and lead to meaningful results across production and operations."
