South Korean petrochemical firm Lotte Chemical Corp. says it plans to liquidate its rubber joint venture in Malaysia to scale back its basic chemicals business while selling stakes in its overseas units to raise nearly US$1 billion to cut debt.
Lotte Chemical has decided to liquidate Lotte Ube Synthetic Rubber Sdn. Bhd. (LUSR) as the 50-50 JV with Japan’s Ube Elastomer Co. based in Johor is a non-core business with low profits.
LUSR, which produces 50,000 tonnes/year of polybutadiene rubber (PBR), has been in the red since the plant launched commercial operation in 2015, except for 2021.
“It is a significant decision as liquidation will only allow the company to collect scrap metal values,” said an industry source in Seoul. “It shows the company’s strong determination to exit the business with limited growth.”
Lotte Chemical aims to halve its basic chemicals business by 2030 amid growing competition from Chinese rivals in order to upgrade its portfolios and focus on new growth sectors.