vice Chairman Park Jin-soo of LG Chemical travelled to the company’s plant in Yeosu, South Jeolla Province, to make sure the company will be able to ward off the crisis brought on by low oil prices. He said the company should face challenge directly, full speed ahead, and promised to not be shaken by them. He met with plant managers to make sure they are ready to face the problems head on and overcome them.
The vice chairman admitted that the uncertainty, both at home and abroad, has been rising and admitted that they cannot sit still and blame someone else for the problems. “We should speed up and face them head on to overcome them before our rivals do, and then the crisis will become an opportunity,” Park told the plant managers.
The vice chairman inspected over 40 units of the Yeosu plant and met with heads of those units for talks on the problems they have, if any. Park plans to continue to make the rounds of the company’s plants in such cities as Daesan, Ochang and Cheongju to inspect not only the plants, but also the marketing units, to make sure they have a stronger grip on the company’s operations.
He often used the words “rough waves” to describe the company’s problems this year caused by the low oil prices, which reduced the value of the inventory of crude oil the company purchased before oil prices began to dive. In addition to the low oil prices, the global demand for petrochemical products has been weakening, led by China. China’s own petrochemical industry has been expanding, boosting the self-sufficiency ratio of the petrochemical products in the country.
Another problem that the petrochemical industry is to face is the more restrictive domestic environmental regulations, which will be enforced from this year. Around 80 percent of the crude oil imported is from Dubai, and the petrochemical industry in Korea produces such petrochemical products as ethylene and propylene, among others, for export. With the price of Dubai crude oil down to less than $50 per barrel, the prices of the petrochemical products have also dropped and are likely to stay low throughout the first half of this year, putting the petrochemical industry in a precarious situation, industry sources said.
LG Chemical, thus, plans to focus on its leading products to keep its top position in tact. The company will strengthen the competitive power of such leading products as ABS, LCD and batteries for cars by expanding their R&D activities and production facilities.
LG Chem officials said it is very important to continue to foster the company’s leading products with segregated strategies so they What the vice chairman meant when he said to “overcome the crisis head-on” is to continue to hang on to leading products to produce profits for the company in this time of crisis.
The company’s capacity to produce Naptha will be boosted to 1.5 million tons per year from just 1 million tons when the capacity of the Naptha Cracking Center in Yeosu is expanded this year. The company will also continue to strengthen the competitive strength of its other leading products, such as OLED and automotive batteries, along with other next generation growth engines, to make up for its sluggish petrochemical operations.
