The company has stopped further spending on its planned Ulsan waste-PET chemical recycling project as it redirects capital toward restructuring and financial stability.
South Korean chemical company Lotte Chemical has decided to discontinue its planned investment in waste-plastic chemical recycling facilities at its Ulsan plant. The investment, originally announced in May 2021, was valued at approximately ₩77 billion, but the company has now cancelled the remaining expenditure as it reassesses its new-business investments amid difficult petrochemical market conditions.
Lotte Chemical had already spent around ₩16.6 billion on the project, leaving approximately ₩60.4 billion in planned investment that will no longer be committed. The decision was approved by the company’s board following a meeting reported to South Korea’s Financial Supervisory Service electronic disclosure system.
The original project was designed to establish a 45,000-tonne-per-year depolymerization facility at the Ulsan No. 2 Plant. The facility was intended to break down waste PET at the molecular level and produce BHET monomers for a system capable of manufacturing up to 110,000 tonnes of high-purity chemically recycled PET, or C-rPET, annually.
Lotte Chemical completed its C-rPET production facility in 2022 and had also finished the design work for the depolymerization process. However, the project faced delays as petrochemical market conditions weakened. Its completion target was previously pushed from late 2023 to late 2027 before the company ultimately decided to discontinue construction of the depolymerization facility.
The completed C-rPET production facility will remain at the Ulsan site rather than being demolished. According to a Lotte Chemical official cited in the report, the company could reconsider the project if market conditions and the recycling ecosystem develop sufficiently in the future.
The decision comes as South Korea’s petrochemical sector continues to face pressure from increased Chinese production capacity and weaker profitability for basic chemical products. The report also points to the relatively high production costs associated with chemical recycling and slower-than-expected growth in demand for recycled plastics as factors affecting investment decisions.
Lotte Chemical is simultaneously directing capital toward broader business restructuring. Its board approved a ₩600 billion capital contribution to H&L Advanced, the integrated entity formed through the combination of HD Hyundai Chemical and Lotte Chemical’s Daesan operations. The funds are intended to support debt repayment and strengthen the company’s financial structure.
The development reflects a broader adjustment among South Korean petrochemical companies as they reassess recycling and other new-business investments while dealing with challenging commodity-chemical markets. Lotte Chemical’s decision leaves its completed C-rPET facility available for potential future use if conditions improve.