Lotte Chemical announces liquidation of LUSR, synthetic rubber subsidiary in Malaysia, reducing investment in basic chemical business

Lotte Chemical announced on October 25 that it will liquidate LUSR, a synthetic rubber production company based in Malaysia. The decision is an important step in Lotte Chemical's strategic restructuring to focus resources on cultivating and strengthening new growth businesses centered on general petrochemicals.

LUSR was established in 2012 as a joint venture between Lotte Chemical and UBE Elastomer, with each company holding a 50% stake. The joint venture aims to meet the growing demand for synthetic rubber due to its wide range of applications in industries such as automobiles and manufacturing.

The liquidation of LUSR at this stage is in line with Lotte Chemical's strategic direction as the company now considers synthetic rubber to be a non-core business. "The liquidation of LUSR is part of our efforts to restore financial robustness and change our business mix," said Lee Hoon-ki, CEO of Lotte Chemical. The move is part of its broader strategy to reduce the proportion of its basic chemical business in its portfolio to below 30% by 2030. The company is shifting its focus to general petrochemicals, which is considered to be more in line with its long-term strategic goals.

The decision to liquidate LUSR is also driven by the need to enhance financial robustness. Lotte Chemical plans to manage risks through strategic business withdrawals, the sale of inefficient assets, and attracting investments. "We will continue to proactively respond to the changing market in accordance with our management strategy," Lee Hoon-ki added.

The global petrochemical industry is undergoing major changes, with companies increasingly focusing on specialization and high-value products. This trend has led Lotte Chemical to decide to abandon synthetic rubber, which, despite its wide range of uses, is not in line with the company's future direction. By focusing on general petrochemicals, Lotte Chemical aims to optimize its business portfolio and focus on its core competencies.