LOTTE Chemical 2022 New Year’s Address

When looking back at last year, despite many people being vaccinated, a coronavirus variant appeared, thus delaying our return to normal life and economic activities. Furthermore, due to global supply chain issues, the prices of oil and raw materials became more volatile, and costs such as maritime logistics rose, thus creating many difficulties for business activities.

But despite such complicated business environments, 2022 was a year in which we made significant progress and to prepare for a new future through the painstaking efforts of our employees.

The Basic Chemicals Division strengthened its business competitiveness through the successful landing of products from the 4EOA Plant and expanded sales of high-value polymer products. The Advanced Chemicals Division successfully completed construction of its plants in India and Indonesia despite production issues of the front industries, while paving the foundation to strategically procure clients through localization. In order to internalize ESG management for the entire company, goals of each area were established a committee was organized to construct a system that can reflect decision-making processes.

First, it is necessary to build a sustainable business base to achieve our vision of becoming a global Top 7 chemical company.

Sustainable growth has become a core value for businesses in accordance to response to the climate change that has recently become a big issue, as well as for changes in global demand trends. Accordingly, in addition to strengthening the competitiveness of existing businesses, we are reviewing plans to diversify our portfolio by finding new business areas. New businesses will be pursued in parallel with various fields such as hydrogen, batteries, plastic recycling, and bio businesses. The hydrogen business involves eco-friendly energy that can replace fossil fuels, and it is requires quick technological development through pan-national cooperation and assertive utilization of partnerships.

We are entering the mobility and battery materials sectors in pace with the acceleration of autonomous driving and the EV market, while also looking to discover new materials. In addition, we are taking the lead in constructing a circular economy for plastics by constructing the Green Factory at the Ulsan Plant and expanding Project Loop.

Second, we must elevate the competitiveness of our existing businesses.

The base for future growth can be constructed when it is supported by the strong competitiveness of existing businesses.

Therefore, it is crucial to execute strategies that can strengthen competitiveness while also preserving the values of existing businesses. The LINE Project, which is the largest-ever overseas investment of the company, is an important project for preoccupying and pioneering the quickly growing market in Southeast Asia. Please provide cooperation so that we can come up with products that will help achieve the best competitiveness and focus our knowhow and capacities in the entire plant construction process by actively integrating safe and eco-friendly new technologies to successfully pursue the project. The Advanced Materials Division should concentrate on procuring leading technologies for the future and for enhancing customer value by reinforcing its R&D. In addition, we should strengthen the world’s best compound technologies and global supply capacities to make this year one in which we become the global no. 1 specialty materials business.

Third, safety, environment and health are the essence of the petrochemical industry.

Safety and environment are becoming very important values and norms, and it urges practical behavioral changes of companies. We declared the safety culture and Green Promise 2030 eco-friendly strategy last year, and we have established intensive mid- to long-term plans such as investing over 500 billion KRW in the safety sector for the next three years, and achieving carbon net-zero by 2050, as we advance our plans. In 2022, we will foster experts and reinforce capacities by newly establishing safety environment sectors at each workplace. Furthermore, we must heighten the safety environment management level of subsidiaries and vendors.

Lastly, we must lead changes through a flexible corporate culture.

We have recognized that organizational culture is a critical factor that makes successful sustainable development of companies possible, and we have made many efforts in various fields. However, the organizational culture must be improved more flexibly and speedily according to the demands of the times amidst the rapidly transforming business environment.