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Recently, South Korean companies Lotte Chemical and HD Hyundai Group announced their plan to integrate the naphtha cracking facilities of both companies in Daejeon, South Korea, in an effort to address the issue of low profit margins in the country’s petrochemical industry. The two companies are currently in talks regarding the merger of their petrochemical assets in the Daisan area, with an evaluation being carried out by a major accounting firm. Sources said that regarding the negotiations, “nothing has been finalized yet; everything is under review.” Industry analysts at local securities firms in Seoul say that the cooperation between these two major South Korean petrochemical companies represents a key step toward voluntary restructuring. Their joint venture, HD Hyundai Chemical Company, has an ethylene production capacity of 850,000 tons per year, and it is operated by Lotte Chemical. Lotte Chemical also operates an ethylene cracking plant in Osan, which is capable of producing 1.1 million tons of ethylene per year, accounting for about 20% of its total annual production capacity of 4.5 million tons. By integrating, the two factories will streamline their operations further; subsequently, the companies will gradually shut down the overlapping facilities in order to reduce production and improve efficiency. According to reports, Lotte Chemical reported a net loss of 246 billion won in the first quarter, up from a net loss of 60 billion won in the same period last year. The company’s operating loss narrowed to 127 billion won, compared with 135 billion won in the same period last year. Sales amounted to 4.9 trillion won, a 3.6% decrease year-on-year.