Seoul, Aug 20
The government will help the ailing petrochemical sector's "voluntary" restructuring efforts aimed at tackling the industrywide crisis stemming from a global oversupply, the industry ministry said on Wednesday.
The road map for restructuring the petrochemical industry is aimed at reducing oversupply, transiting to the production of high-value specialty products, improving the fiscal health of companies and minimising the impact of the restructuring on regional economies, according to the Ministry of Trade, Industry and Energy, reports Yonhap news agency.
The government support for the restructuring plan will be provided under three principles: "simultaneous" restructuring of three petrochemical industrial complexes, "sufficient" self-rescue efforts and preparation of a "feasible" business restructuring plan by companies, and the establishment of a "comprehensive" government support package, the ministry explained.
The plan was announced during a meeting of economy-related ministers on strengthening the industrial competitiveness of South Korea that came amid concerns that local petrochemical companies may not survive the ongoing crisis sparked by sluggish global demand and the oversupply of cheap Chinese products.
A recent report by Boston Consulting Group warned that if the current downturn persists, nearly half of South Korean petrochemical firms may not survive the next three years given their weak financial health.