President Kim Gyo-hyun of Lotte Chemical.

Lotte Chemical posted 15.123.5 trillion won in sales and 1.107.6 trillion won in operating profit on a consolidated financial statement last year, the company said on Feb. 7.

The figures represent a 5.9 percent year-on-year drop and a 43.1 percent year-on-year plunge in sales and operating profit, respectively.

Last year the company was heavily influenced by dwindling demand, caused by global uncertainties, Lotte Chemical said.

On the other hand, the company’s U.S. plant secured stable profitability based on the advanced materials business with a focus on compound products and shale gas, while the company proactively responded to market changes by diversifying material sourcing through a joint venture with refinery companies and expanding product facilities in areas such as polycarbonates and ethylene oxide additive (EOA), the company said.

Lotte Chemical bagged 3.692.1 trillion won in sales in 2019 Q4, a 4.2 percent decline over the previous quarter, and 142.6 billion won in operating profit in 2019 Q4, a 42.2 percent plunge over the previous quarter.

The olefin division saw profitability decline due to one-off costs, caused by the regular maintenance of Daesan plant and a reducing spread of each item, brought about by upward movements of raw material prices.

The aromatic division reported a low profit, influenced by declining demand, caused by a supply glut related to continued inflow volumes from new and expanded plants.

Lotte Advanced Materials, one of Lotte Chemical’s subsidiaries, saw profitability decline by a small margin due to declining sales of major products in the off-season, while Lotte Chemical Titan followed suite, influenced by a continued supply glut in the Southeast Asian market.

In a related development, Lotte Chemical USA (LC USA), which went into commercial operation in the first half of 2019, maintained profitability based on the securing of stable clientele and high unit price competitiveness based on shale gas.

Lotte Chemical said outside uncertainties are predicted to be prolonged due to outside and inside regional volumes and declining demand.

The company plans to strengthen the competitiveness of the conventional businesses based on synergetic effects from the merger with Lotte Advanced Materials.

It will also devote itself to creating profit on a stable basis by expanding value-added specialty businesses.

Lotte Chemical, GS Energy Set Up Joint Venture

Lotte Chemical established a joint-venture with GS Energy. Total investments into Lotte GS Chemical stood at 800 billion won, and its paid-in capital amounted to 320 billion won.

Lotte Chemical owns a 51 percent stake in the joint venture by contributing 163.2 billion won. Executive Vice President Lim Dong-hee in charge of new business at Lotte Chemical’s Basic Materials Division was appointed to head the joint venture.

A view of Lotte Chemical’s plant in Yeosu. (Photos: Lotte Chemical)