Lotte Chemical is cancelling the plan to build a depolymerization facility that chemically recycles polyethylene terephthalate (PET) at its Ulsan plant, about five years after first unveiling the investment in May 2021, reported the Seoul Economic Daily.

Lotte Chemical’s Ulsan plant. (Source: Seoul Economic Daily)

The decision is seen as unavoidable given the prolonged downturn in the petrochemical industry.

Lotte Chemical had originally planned to invest about 100 billion won to build Korea's first depolymerization plant capable of processing waste PET, with annual capacity of 45,000 tons, at its No. 2 Ulsan plant.

It also planned to build a 110,000-ton C-rPET production facility by June 2024 that would use bis(2-hydroxyethyl) terephthalate (BHET) produced there to make PET again. The investment is about 16.6 billion.

But actual spending has been minimal, even after the investment period was extended once to the end of 2027, as the domestic petrochemical industry has been mired in a prolonged slump since the second half of 2022.

“We determined that further investment would be difficult because of changes in the business environment, including the prolonged slump in the petrochemical industry and our participation in the restructuring of the domestic petrochemical sector," Lotte Chemical said. A company official added that the possibility of resuming the investment remains open.

Strengthening competitiveness of Korea’s petrochemical sector

Separately, Lotte Chemical's board approved a plan to inject 600 billion won into H&L Advanced to repay existing borrowings and improve its financial structure.

H&L Advanced, which formally launched earlier this month, is the first product of an industry restructuring drive aimed at strengthening the competitiveness of Korea's petrochemical sector. It is a merged entity combining HD Hyundai Chemical and Lotte Daesan Petrochemical.