Lotte Chemical Plans to Sell Malaysia Business

en.Wedoany.com Reported - Recently, South Korea's Lotte Chemical announced the resumption of its overseas asset divestiture plan, intending to sell partial stakes in its Malaysian subsidiary Lotte Chemical Titan and the Indonesia project.

Titan's operational difficulties were laid bare in its latest financial report. In the second quarter of 2026, the company's net loss widened to RM174 million. Although revenue surged 116% to RM3.1 billion thanks to the commencement of the Indonesia LINE project, inventory write-downs of RM140 million and depreciation costs from the new plant completely eroded the revenue growth. The plant's utilization rate stood at only 50%, far from the economies of scale needed to break even.

Behind Lotte Chemical's urgency to offload Titan lies its own precarious financial condition. The company's basic chemicals business has posted operating losses for four consecutive years, with cumulative losses nearing KRW 3 trillion. Net debt swelled from KRW 6.7 trillion at the end of 2025 to KRW 8.1 trillion in the first quarter of 2026, and all three major rating agencies have downgraded their credit outlooks to "negative." Even though the company briefly returned to profitability in the first quarter of 2026, agencies still warn that the full year could mark a fifth consecutive year of losses.

Divesting Titan is a key step in Lotte Chemical's strategic transformation. The company plans to increase the share of specialty materials business to over 60% by 2030, in order to escape the structural oversupply predicament of basic chemicals. In addition, Lotte is pushing forward with the merger of its Daesan plant with HD Hyundai Chemical, with an expected transfer of approximately KRW 1.6 trillion in debt to improve its asset-liability structure.