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Hanwha Chemical applies incentives for voluntary restructuring in caustic soda factory

Collected: 2016.08.18

Distributed: 2016.08.18

Source: Go Direct

[Photo by Ministry of Trade, Industry and Energy]

Hanwha Chemical Corp. and three other companies became the first applicants for the so-called One-Shot Act designed to facilitate and encourage corporate restructuring that took effect on Tuesday, said the Ministry of Trade, Industry and Energy.

The act formerly called Corporate Vitality Enhancement Act, is intended to encourage voluntary restructuring by streamlining legal procedures and regulations and providing various incentives in tax and fund, research and development and hiring.

The Korean government would decide whether to approve plans of the companies including the chemical company through a meeting of corporate restructuring deliberation committee within 60 days. The chemical company might be the first company to make use of the law.

Hanwha Chemical has pushed for a plan to sell a chlorine and caustic soda factory at a petrochemical industrial complex in Ulsan to chemical company Unid Co.

The factory runs processes of manufacturing chlorine and caustic soda through electrolysis of salt water. Chlorine is mostly used as a material of polyvinyl chloride (PVC) and caustic soda, as a material of detergents and for water treatment.

Unid plans to remodel the production facility to produce caustic potash. Caustic potash is widely used as a material of soap and glass and for semiconductor cleaning.

The petrochemical sector is cited as an area of overcapacity in need of streamlining.

“We have decided to apply for corporate restructuring in order to solve the problem of oversupply in caustic soda segment instead to focus on PVC and we are hopeful of cost-saving through tax benefits,” said an official of Hanwha Chemical.

By Seo Dong-cheol

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