President Huh Soo-young of Honam Petrochemical Corp., an affiliate of Lotte Group, said the expansion of the naptha cracking center (NCC) will be completed soon and will go online with the company’s own technologies, which is a very significant milestone in the company’s history.

Honam Petrochemical will be the largest producer of ethylene in Korea, besting Yeochon NCC, and will also rank 10th among producers of polyolefin with the annual capacity extended to 3.5 million tons. The company’s annual ethylene production capacity will reach 2 million tons, exceeding the 1.87 million tons produced by Yeochon NCC. Huh, however, warned that the company could lose its top position in ethylene production in the country as rival companies continue to expand their capacities. 

Huh became the top executive of Honam Petrochemical in early February while he was the CEO of KP Chemical, also an affiliate of Lotte Group.

He joined Honam Petrochemical in 1976 when the company was launched and rose through the ranks, holding such positions as head of the new business team and head of the research institute, and is known as one of the foremost experts on petrochemical production.

The company’s overseas plant construction projects to be completed this year include the project to build ethylene oxide, ethanol, and multiple raisin plants in China and an engineering plastic plant in Alabama in the United States. as the new CEO steps up their construction schedules and the exploration of markets for those petrochemical products.

The company also plans to build a large NCC in Indonesia in a bid to market the product throughout Southeast Asia. It also will engage in a gas exploration project jointly with Korea National Oil Corp. in Uzbekistan this year. The company projects to post 20 trillion won in sales at home and 5 trillion won in sales overseas this year if its expansion projects and repairs on existing production facilities for petrochemical products go as planned. Titan, one of the company’s affiliates producing polyethylene, may add an NCC pending discussion, which may require further talks with the Malaysian authorities, Huh said.

With regard to investments in Uzbekistan, he said talks are in progress, but many thorny problems still remain including investment conditions and financing.

The new CEO has also reorganized the company to have a tighter grip on overseas affiliates whose numbers have been rising fast lately, requiring an independent office to control them. He said an international cooperation team will be set up, along with strengthening the area of investor relations for smoother communication with the financial market and individual investors.

Regarding the merger of Honam Petrochemical and KP Chemical, he said the need for the move has been unchanged, but the problem is minority shareholders and the timing is the key. Honam Petrochemical tried to merge with KP Chemical, but failed due to the objections of minority shareholders who hold around 40 percent of total shares.

The CEO said the company will continue to seek M&As in the future as part of its growth strategy and the company will continue to save cash in order to take them up when the right time comes along.