On August 20, Deputy Prime Minister and Minister of Economy and Finance Koo Yun Cheol chaired the Ministerial Meeting on Strengthening Industrial Competitiveness at the Government Complex-Seoul.
In his opening remarks, DPM Koo noted the signing of a business restructuring agreement involving ten major petrochemical companies. He stated that each company will be required to submit a detailed restructuring plan by the end of the year, with the goal of reducing production capacity by up to 3.7 million tons in Naphtha Cracking Center (NCC) facilities.
DPM Koo stressed that the key to overcoming the current challenges lies in reducing excess capacity and fundamentally strengthening competitiveness. He also highlighted that petrochemical companies and their major shareholders must present binding business restructuring and competitiveness enhancement plans with a sense of urgency.
The government, for its part, will not stand by but will fully carry out its responsibilities. Led by the Ministry of Trade, Industry and Energy, it will work in close consultation with industry so that the self-rescue efforts of companies and major shareholders can be duly incorporated into restructuring plans. The Financial Services Commission, together with creditor financial institutions, plans to step up monitoring of companies’ financial conditions and self-rescue efforts. If the plans submitted by industry are deemed genuine, the government will in turn provide timely support through comprehensive measures, including regulatory easing, financing, and tax assistance. At the same time, firms that postpone restructuring or attempt to free-ride will face stern measures, such as exclusion from future government support.
DPM Koo noted that, fortunately, Korea has the successful precedent of the shipbuilding industry, which made a remarkable comeback through painful restructuring efforts. He emphasized that the shipbuilding industry’s intensive self-rescue measures bore fruit, allowing it to reclaim the world’s No.1 position and make a decisive contribution to the recent Korea-U.S. tariff negotiations; while acknowledging that the process may be painful, if the petrochemical industry follows in the footsteps of shipbuilding, it too can achieve a dramatic resurgence.
Last but not least, he called for joint efforts between the public and private sectors to achieve a strong rebound in the petrochemical industry, affirming that if industry takes on restructuring with a resolute determination, the government will do its utmost to provide support. Going forward, the government will convene the Ministerial Meeting on Strengthening Industrial Competitiveness on a regular basis to closely monitor the progress of restructuring and to promptly design and implement necessary measures.
Please refer to the attached files.
