Lotte Chemical plans to sell some of its businesses in Malaysia, Indonesia, and the United States

On August 17th, the Economic Daily of South Korea quoted anonymous government officials as saying that Lotte Chemical has revealed its plan to sell its overseas basic chemical business to creditors and the South Korean Ministry of Industry, Trade and Resources, involving three assets in Malaysia, Indonesia and the United States. The company is currently evaluating the market situation and searching for potential buyers.
Previously, due to the impact of the Middle East situation, the sale process of assets in Malaysia and Indonesia was temporarily suspended, but now it has been restarted. For Lotte Chemical, which has suffered consecutive losses and high debt for many years, selling overseas assets has become an important means to accelerate capital recovery and improve its financial situation.
Titan has been losing money for 17 consecutive quarters and has become the top selling target
Lotte Chemical Titan, a Malaysian subsidiary, is considered a key asset for this sale. In 2010, Lotte Chemical acquired the company for approximately 1.5 trillion Korean won and currently holds a 74.7% stake.
But the business performance continued to deteriorate after the acquisition. Titan has been losing money for 17 consecutive quarters, with an additional provision of approximately KRW 1 trillion in asset impairment losses in the fourth quarter of 2025. In February 2026, the company announced its largest quarterly and full year losses in history.
The core reason for the deterioration of profitability is still the narrowing profit margin of basic petrochemical products. The current price difference between high-density polyethylene and naphtha has dropped to below $300 per ton. With the high cost of naphtha, the continuous increase in supply in the Southeast Asian market has further compressed the profits of the equipment.
For assets that have been losing money for 17 consecutive quarters, the difficulty of selling them is clearly not low. Lotte Chemical had previously failed twice to sell PTA assets in Pakistan, and its Malaysian synthetic rubber joint venture was ultimately liquidated in 2024. Titan's assets are larger in scale and more complex in business, and there is still significant uncertainty in the final transaction price and buyer selection.
Indonesia LCI: Introducing sovereign funds, deal still under negotiation
Unlike Titan's direct search for buyers, Lotte Chemical plans to introduce Indonesia's sovereign wealth fund Danantara by selling a portion of its equity.
Lotte Chemical's LCI project in Indonesia has a total investment of approximately 5.7 trillion Korean won. The Xiliang Comprehensive Petrochemical Center will be put into operation in May 2025, with a mixed feed cracking unit of 1 million tons/year ethylene and 520000 tons/year propylene, and a supporting capacity of 250000 tons/year polypropylene.
However, the project is still in a loss making state after it is put into operation. In June of this year, Lotte Chemical's Indonesian subsidiary also received a loan of 790 million US dollars from its parent company.
According to reports, Danantara is in talks to acquire a 25% to 30% minority stake in LCI, with a transaction valuation of approximately $1.7 billion. LCI is currently held by Lotte Chemical Titan with a 51% stake, Lotte Chemical with a 24% stake, and a South Korean consortium with a 25% stake.
During the visit of the Indonesian President to South Korea in April this year, both sides accelerated the relevant negotiations, but later postponed them due to the impact of the Middle East situation. At present, no binding agreement has been signed for the transaction, and the final shareholding ratio and valuation have not been determined.
Continuation of US asset sale plan

In terms of assets in the United States, Lotte Chemical Louisiana Company mainly produces ethylene glycol. The factory was put into operation in 2019, with a supporting capacity of 1 million tons/year of ethylene and 700000 tons/year of ethylene glycol.
Lotte Chemical announced the sale of 40% equity in the subsidiary as early as October 2024, with a transaction amount of approximately 660 billion Korean won. This plan should be a continuation of the previous asset disposal arrangement. In July of this year, the factory was shut down for maintenance for about three weeks due to critical equipment failure.
Four consecutive years of losses, net debt rising to KRW 8 trillion
From 2022 to 2025, the company has recorded operating losses for four consecutive years, with a cumulative loss of nearly 3 trillion Korean won in its basic chemical business. In 2025, the operating loss reached 943.1 billion Korean won, the highest record since the company's establishment, and the net loss for the whole year further expanded to 2.4762 trillion Korean won.
Debt pressure continues to rise. By the end of 2025, the company's consolidated net debt was approximately 6.7 trillion Korean won, and by the end of the first quarter of 2026, it had risen to 8.06 trillion Korean won. The ratio of net debt to total capital increased from 38% to 43%.
In June of this year, South Korean rating agencies downgraded Lotte Chemical's credit rating outlook from "stable" to "negative". The company issued 400 billion Korean won bank guarantee bonds in April to repay debts, and plans to raise another 200 billion Korean won in July.
Over the past two years, Lotte Chemical has raised approximately KRW 1.7 trillion through the sale of non core assets, but the cash flow from asset disposals is still insufficient to offset ongoing operating losses and financing needs.
Lotte Chemical Remakes Asset Portfolio
Lotte Chemical previously proposed to significantly reduce the proportion of basic chemical business and increase the proportion of advanced materials, fine chemicals, battery materials, and hydrogen energy business by 2030.
But in the context of continuous losses and rising debt pressure in the basic chemical business, this transformation is no longer just a business upgrade, but an urgent asset restructuring.
Shutdown, merger, and sale are becoming the main ways for Lotte Chemical to compress its basic chemical business. The restart of overseas asset sales this time also means that the company is extending this round of contraction from within South Korea to Southeast Asia and the United States.
Southeast Asia remains a rapidly growing market for global petrochemical demand, but the growth in demand has not been translated into profits for Lotte Chemical. Faced with competition from low-cost production capacity in China and the Middle East, Titan has suffered losses for 17 consecutive quarters, indicating that relying solely on regional demand growth is difficult to change the profitability dilemma of high cost petrochemical assets.