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Photo = Lotte Chemical |
[Alpha Biz= Kim Jisun] Lotte Chemical is selling its Pakistan subsidiary as part of its restructuring strategy to reduce production of basic commodity products and expand its specialty (high-value-added) business.
According to industry sources on Tuesday, Lotte Chemical will sell its 75.01% stake in Lotte Chemical Pakistan to a consortium consisting of Pakistan-based AsiaPak Investments and UAE petrochemical company Montage Oil DMCC. The transaction is estimated to be worth around 100 billion won. Lotte Chemical’s board of directors is scheduled to approve the deal on the 19th.
Lotte Chemical Pakistan primarily produces purified terephthalic acid (PTA), with an annual production capacity of 500,000 tons. PTA is a commodity chemical used in PET bottles, industrial yarns, and textiles. Lotte Chemical acquired its 75.01% stake in the company for 14.7 billion won in 2009. However, intensified price competition from Chinese manufacturers has eroded profitability, prompting the decision to sell the subsidiary.
In 2023, Lotte Chemical signed a deal to sell the unit to Pakistani chemical firm Lucky Core Industries, but the transaction was canceled due to local circumstances. Lotte Chemical is currently rebalancing its portfolio by scaling down its basic chemicals segment and strengthening its specialty products business. The company aims to reduce the revenue share of its basic chemicals division from 60% to 30% by 2030.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
