LOTTE Chemical to merge into integrated corporation after spinning off Daesan plant…

[Photo Description]: Specialty materials produced by LOTTE Chemical for various applications

■ LOTTE Chemical to proceed with merger with HD Hyundai Chemical following spin-off of Daesan plant… presenting a best practice case through proactive petrochemical business restructuring.
■ Targeting over 60% share of specialty materials by 2030… planning to build Korea’s largest single compounding plant in Yulchon, Jeonnam to supply customized materials and produce Super EP for Physical AI, aviation, and aerospace.
■ Full-scale establishment of hydrogen energy value chain… phased completion of four hydrogen fuel cell power plants totaling 80MW within the year, and commercial operation of Korea’s largest 450 bar high-pressure hydrogen shipment center.
■ Strengthening supply of key materials for batteries, semiconductors, and AI… expanding supply of high-end copper foil and AI circuit foil, and increasing production capacity of semiconductor developer (TMAH), ranked No.1 globally.

LOTTE Chemical is preemptively implementing petrochemical business restructuring under the “Special Act on Promotion of Corporate Vitality” through the spin-off of its Daesan plant and the merger into an integrated corporation. LOTTE Chemical will spin off the Daesan plant and then proceed with a merger of the newly established corporation and HD Hyundai Chemical. The merger will be carried out through an absorption merger in which the newly established corporation will be absorbed into HD Hyundai Chemical, and in return, LOTTE Chemical will receive newly issued shares. As a result, LOTTE Chemical and HD Hyundai Oilbank will each hold a 50% stake. The merger is targeted for completion by September following contract signing in June 2026, with both parties contributing KRW 600 billion each to the integrated corporation.

Through this, the company aims to strengthen vertical integration from feedstock procurement to final product production and enhance operational efficiency by establishing an integrated production system. In addition, it plans to fundamentally improve cost competitiveness and accelerate the transition toward a high-value-added product portfolio.

In December 2025, LOTTE Chemical also submitted an additional business restructuring plan in the Yeosu industrial complex, involving integration and adjustment of overlapping facilities with Hanwha Solutions, DL Chemical, and Yeochun NCC. With the submission of a detailed plan on March 20, the company is further accelerating its business transformation.

Alongside proactive restructuring, LOTTE Chemical is rapidly advancing its transition to high-value-added businesses. By 2030, it aims to expand the share of specialty materials to over 60%, strengthen its chemical business portfolio, and focus on transforming into a specialty chemical company with both profitability and growth potential.

Its subsidiary, LOTTE Engineering Plastics, is currently building Korea’s largest single compounding plant with an annual capacity of 500,000 tons in the Yulchon Industrial Complex in Jeonnam. Some production lines have already begun commercial operation, and full completion is scheduled for the second half of 2026. The plant will supply customized high-performance materials for key industries such as mobility and IT, and plans to produce advanced Super EP products for Physical AI, aviation, and aerospace in the future.

LOTTE SK Eneroot began commercial operation of a 20MW hydrogen fuel cell power plant in Ulsan on June 2025. By the end of 2026, it plans to sequentially build four hydrogen fuel cell power plants, providing a total of 80MW of stable power supply over 20 years.

LOTTE Air-Liquide Ener’Hy completed construction of Korea’s largest 450 bar high-pressure hydrogen shipment center in Daesan, Chungnam, and commenced commercial operations in November 2025. It currently produces enough hydrogen to supply approximately 4,200 passenger vehicles or 1,100 commercial hydrogen buses per day.

LOTTE Energy Materials is supplying key materials to global battery, ESS, AI, and semiconductor industries based on its advanced copper foil and next-generation battery material technologies. In particular, it is expanding the supply of high-value-added circuit foil for AI through Korea’s only circuit foil production base and broadening its presence in the global market.

Hantok Chemicals, a joint venture between LOTTE Chemical and Japan’s Tokuyama Corporation, is expanding additional production facilities based on its position as the global No.1 manufacturer of semiconductor developer (TMAH). TMAH is a key material used in the development process of fine circuit patterns for semiconductors and displays. The company plans to build an additional developer production facility of approximately 9,800 pyeong in Pyeongtaek, Gyeonggi Province to further strengthen market leadership.

LOTTE Chemical stated, “Through rationalization of our business structure, we will secure fundamental competitiveness and accelerate our expansion into a high-value-added specialty chemical company.”