Hanwha Solutions is joining hands with Lotte Chemical and DL Chemical to establish an integrated naphtha cracking center (NCC) entity, in step with the government's petrochemical industry restructuring policy. The joint business restructuring plan has received final approval following a review by the Ministry of Trade, Industry and Energy.

In a regulatory filing on the 22nd, Hanwha Solutions announced that its joint business restructuring plan, under the 'Special Act on Vitalizing Corporate Business,' has obtained approval from the Ministry of Trade, Industry and Energy's review committee. Earlier, four companies — Hanwha Solutions, Lotte Chemical, DL Chemical, and Yeochun NCC — applied for an approval review on March 20 and completed the final approval process on the 20th of this month.

Core Focus on NCC Facility Rationalization... Yeochun NCC to Transition to Three-Company Joint Operation System

The core of this restructuring, aimed at resolving the structural oversupply problem in the domestic petrochemical industry and enhancing competitiveness, is the 'rationalization of naphtha cracker (NCC) facilities.'

The restructuring will proceed through Hanwha Solutions making in-kind contributions of its Yeosu PE and petroleum resin businesses to Yeochun NCC. Through this, Yeochun NCC — currently jointly operated by Hanwha Solutions and DL Chemical — will transition into a three-company joint operation system with the future participation of Lotte Chemical.

The integrated entity will be formally established after the completion of in-kind contributions by Hanwha Solutions and DL Chemical, through a merger of Yeochun NCC with Lotte Chemical's spun-off entity.

Paid-in Capital Increase to Repay KRW 545 Billion in Borrowings

Ahead of the launch of the integrated entity, funding will be raised to repay Yeochun NCC's market-based borrowings of KRW 545 billion. Existing shareholders Hanwha Solutions and DL Chemical will each participate in a paid-in capital increase of KRW 272.5 billion (50%), sharing the financial burden.

Hanwha Solutions plans to use this restructuring as an opportunity to accelerate the transformation of its business portfolio toward high-value-added products. In particular, the company expects that integrating the petrochemical production system within the Yeosu Industrial Complex will improve facility operational efficiency, thereby contributing to profitability.

Regarding the investment in the integrated entity, the company stated, "The specific investment terms and schedule will be disclosed separately at the point they are finalized through relevant procedures, including a board of directors' resolution."