"In general, the petrochemical industry is forecast to have improved earnings this year from previous years as market situations are looking better. We will try hard to improve the ongoing Korea-China Free Trade Agreement in order to bring substantial benefits to the local petrochemical industry, Vice Trade Minister Kim Jae-hong said.
In a meeting with 150 chief executives and senior executives from the industry at the Plaza Hotel in downtown Seoul, the vice minister said the industry needs to collaborate to address regulatory issues related to the government's attempt to pursue environmentally friendly policies.
"For the sustainability of the industry, the government will be active in communicating with companies, Kim said in response to a question about how the government will address those challenging issues.
In a related issue, the Korea Petrochemical Industry Association (KPIA), issued a statement that it expects demand for ethylene to rise by 3.8 % this year, while supply growth is forecast to remain at 2.8 %. "A sign of economic recovery in developed countries and limited growth in factory outputs are helping us, the KPIA said.
The KPIA expects Korea's exports of petrochemical products to exceed USD 50 billion this year for the first time.
But competition will be getting fiercer mostly due to advancements in the technological level of their Chinese rivals, resulting in a spreading out of products below the market price.
"Last year was very tough for the industry because the global industry had been seeing consolidation amid paradigm change in petrochemicals, and energy related markets, meaning that we should shift toward the production of value-added products by cutting reliance on cheap and unprofitable ones, the vice minister said.
Kim reiterated that the local petrochemical industry needs to collaborate with companies as barriers between industries are blurring amid the explosive growth in connected devices.
The government said the industry spent 6.5 trillion won on facilities last year and its total exports reached USD 48.3 billion.
Source: Daily "The Korea Times", Seoul; 14 Jan 2014 (Syed Rashid Ali, Karachi, Pakistan)