South Korea pushes for consolidation in ailing petrochemical sector SEOUL, August 22 (AJP) - Faced with a deep-seated crisis in its petrochemical industry, the South Korean government has set a firm deadline for a major restructuring, a move that is expected to accelerate the vertical integration of refiners and chemical producers. The government's push for consolidation comes as the sector grapples with years of overexpansion and intense market pressures. Industry experts say the sector's current woes are not only the result of global oversupply, particularly from China, and weak demand but also of domestic firms' own aggressive capacity expansions. Many companies continued to build new facilities even as profit margins shrank, creating a glut that now threatens the industry's long-term viability. South Korea currently operates 10 naphtha crackers (NCCs) — four each in Yeosu and Daesan and two in Ulsan — which are central to producing key chemicals like ethylene and propylene. With an annual ethylene capacity of about 13 million tons, South Korea ranks fourth globally, trailing only China, the U.S., and Saudi Arabia. This capacity is projected to increase to nearly 14.7 million tons once the S-Oil Shaheen project is completed in late 2026, further exacerbating the oversupply issue. To combat the crisis, the government has requested a voluntary industry agreement to reduce domestic NCC output by 2.7 to 3.7 million tons, an amount equivalent to up to 25 percent of total capacity. This targeted reduction aims to align production with actual local demand. Vertical integration has emerged as the most viable path forward. By merging with refiners, which produce naphtha, chemical manufacturers can significantly lower their production costs while strategically shedding excess capacity. Discussions are underway for several major deals, including one in Daesan, where Lotte Chemical may transfer its NCC facilities to HD Hyundai Chemical in exchange for cash or other assets from its affiliate, HD Hyundai Oilbank. At the Yeosu complex, the largest industrial site in South Korea, a large-scale restructuring involving key players like GS Caltex, LG Chem, and Lotte Chemical is now considered almost unavoidable, especially given the government's ambitious reduction targets. 2025-08-22 15:02:46

Hyundai Motor Group pours billions into US robotics venture SEOUL, August 22 (AJP) - Hyundai Motor Group has injected nearly 6 trillion won, or about $4.3 billion, into HMG Global, an intermediate holding company in the United States that oversees the group’s robotics and new business ventures, including Boston Dynamics. The consistent capital infusions reflect Hyundai’s aggressive push into robotics and future technologies, even as the U.S. subsidiary continues to operate at a loss. According to Hyundai Motor’s latest semiannual report, the company made its most recent investment on Aug. 8, injecting 218.9 billion won into HMG Global through a paid-in capital increase. Established in Delaware as a limited liability company in 2022, HMG Global acts as the main shareholder of Boston Dynamics and is tasked with scouting new technologies and startups for the group. The entity is wholly owned by the Hyundai Motor Group, with Hyundai Motor holding a 49.5 percent stake, Kia 30.5 percent, and Hyundai Mobis 20 percent. Despite the sizable funding, HMG Global has yet to turn a profit. It reported comprehensive losses of 338.7 billion won in 2023, 163 billion won in 2024, and 344.1 billion won in the first half of 2025. The company’s revenues for the same periods were 84.4 billion won, 116.1 billion won, and 66.8 billion won, respectively. A key driver behind Hyundai's financial commitment is its strategic focus on robotics. The group acquired Boston Dynamics in 2021 and has since funneled significant funding into the company through HMG Global. In addition to the holding company, Hyundai Motor Group also established the Boston Dynamics AI Institute in 2022, with a total investment of 566.7 billion won from Hyundai Motor, Kia, and Hyundai Mobis. 2025-08-22 11:16:01

[[K-Defense]] South Korea moves to develop its own electronic warfare aircraft SEOUL, August 21 (AJP) - South Korea has taken its first steps toward building a domestically produced electronic warfare aircraft, issuing a $1.38 billion tender that would place the country in a select club of nations able to jam and disable enemy radar systems. The Defense Acquisition Program Administration, South Korea’s arms procurement agency, set up the plan last month under the title “Electronic Warfare Aircraft (Block-I) System Development Project,” according to industry officials on Thursday. The program calls for the delivery of four aircraft by 2034, with the budget covering both development and production. Only the United States, Russia and China currently field operational electronic warfare planes, which are considered a critical asset in modern air combat. The platforms exploit the electromagnetic spectrum — radio signals, radar and infrared — to detect, protect and communicate, while disrupting or degrading an adversary’s ability to do the same. South Korea’s system is designed to blanket the Korean Peninsula, strengthening its ability to counter North Korea’s increasingly sophisticated missile and radar networks. While Germany, Italy and Japan have pursued similar programs, none have reached deployment. Four domestic defense firms are competing for the contract. Korea Aerospace Industries and Korean Air are proposing to convert Bombardier’s G6500 business jet into the base aircraft, while Hanwha Systems and LIG Nex1 are vying to supply jamming and signal interception systems. Bids are due in early September, with the government expected to select contractors by October. 2025-08-21 14:30:29

[[K-Tech]] Krafton brings real-time AI to its virtual world at Gamescom 2025 SEOUL, August 21 (AJP) - Krafton, the South Korean publisher behind PlayerUnknown’s Battlegrounds, is betting that artificial intelligence will change the way people play life simulation games. At Gamescom 2025, taking place in Cologne, Germany, the company unveiled plans to weave real-time AI into inZOI, its early-access simulation title, enabling players to converse naturally with digital characters and receive lifelike emotional responses. “After listening to our users, we decided to redesign the roadmap from scratch,” Hyunjun Kim, the project manager at Krafton’s inZOI Studio, told reporters. “We’ve completely reworked the interaction system of the character ‘Zoi’ to enable human-like emotional behavior.” The revamped system equips Zoi with a built-in AI chatbot engine. Players can speak directly to the character or send written messages, and Zoi will respond in real time with AI-generated speech. Expressions, gestures and mood will shift according to the conversation. Kim said early tests produced amusing, if sometimes unpredictable, results. “We ran a test where players asked game characters to lend them money, and most of them just ran away and refused,” he said, smiling. “We’re still in R&D, and there are many unknowns ahead — but we’re committed to pushing forward with bold experiments.” Krafton has been among the most aggressive game publishers experimenting with artificial intelligence. Last month, it announced a collaboration with SK Telecom on a new post-training method for large language models, applied to three systems with roughly seven billion parameters each. The models, dubbed OpenThinker2, OpenThinker3 and AceReason-Nemotron-1.1, showed improved performance on a widely used math reasoning benchmark. Alongside its AI push, Krafton is still expanding inZOI’s content. At Gamescom, the company rolled out a free downloadable update called inZOI: Island Getaway, which introduces Cahaya, a sun-drenched island city modeled after Southeast Asian resorts. The expansion adds farming, mineral harvesting, deep-sea fishing and boating — mechanics that were absent from earlier builds of the game. Despite the progress, a full release remains far off. “When we started early access, we already expected this to take a long time,” Kim said. “We’ll keep delaying the official launch until we’ve fully incorporated user feedback. Not next year — realistically, the earliest would be sometime the year after.” 2025-08-21 10:37:04

[[K-Tech]] KAI delivers AI-based air combat training system to Air Force SEOUL, August 14 (AJP) - Korea Aerospace Industries (KAI) has delivered an artificial intelligence (AI)-powered tactical simulation and training system to the South Korean Air Force, the company said on Wednesday. The system, designed for tactical development and pilot training, is part of a contract valued at 35.5 billion won (about $26 million) and incorporates reinforcement learning–based AI, making it the first of its kind in the country. It allows virtual aircraft to learn from real-world combat data and autonomously adapt their tactics over time. The Air Force has faced challenges in conducting large-scale flight training due to restricted airspace and noise complaints from civilians. The new system, however, enables combat simulations in a fully virtual environment, helping to overcome these constraints. As part of the project, KAI also developed Level D simulators for the KF-16 and FA-50 fighter jets, incorporating virtual reality (VR) and mixed reality (MR) technologies. Level D represents the highest certification standard for flight simulations. The system also integrates a range of advanced technologies, including AI-controlled virtual aircraft that act as both friendly and adversary forces, high-difficulty mission scenarios based on real-world tactics, and voice recognition features that enable pilots to issue and respond to spoken commands. "The latest achievement sets a new standard for next-generation military training," a KAI official said. "We aim to lead the development of future Modeling & Simulation (M&S) technologies, including manned-unmanned integrated systems and Live-Virtual-Constructive (LVC) training platforms, contributing to the modernization of our armed forces." 2025-08-14 16:19:40

Ethylene producer avoids bankruptcy but clash remains over recovery plans SEOUL, August 13 (AJP) - Petrochemical company Yeochun NCC (YNCC) managed to avoid going bust after its shareholders, Hanwha Solutions and DL Chemical, agreed to provide emergency loans to their debt-ridden joint venture. In an emergency board meeting early this week, Hanwha and DL decided to inject 200 billion won (about $145 million) to rescue the country's third-largest ethylene producer, though tensions remain as both sides dispute the causes of YNCC's prolonged losses and continue to struggle to agree on a path to full recovery. DL criticized Hanwha for demanding lower feedstock prices, arguing that such terms would undermine YNCC's competitiveness. DL said it had proposed long-term supply contracts with a downward price cap intended to cover variable costs and help stabilize YNCC's business structure. It claimed Hanwha rejected those terms and instead pushed for feedstock prices that would disproportionately benefit itself, even at the expense of YNCC's fair profits. DL further warned that providing financial support without first addressing the root causes of YNCC's crisis would amount to blind backing, posing a risk of moral hazard and breaching fiduciary responsibility. On Tuesday, DL argued that the 2025 tax probe into YNCC was comparable to a 2007 audit, which had ended in its favor following a Supreme Court ruling. DL suggested that the circumstances were similar and implied that the current case should not be treated as a serious violation. This came after Hanwha revealed that the National Tax Service had imposed a 106.0 billion won (about $80 million) penalty on YNCC earlier this year for allegedly supplying ethylene and C4R1 at below-market prices. According to Hanwha, 96 percent of the total - about 96.2 billion won (about $72.6 million) - stemmed from transactions with DL. Hanwha issued a statement the following day to refute DL. The company stressed that the two audits involved different taxable items and produced entirely separate outcomes. It rejected the idea that the earlier ruling could be used to dismiss the findings of the current probe. Hanwha also took issue with DL's stance on product pricing. It claimed that DL had been pushing for an imbalanced structure - one where Hanwha pays a premium for ethylene, which it uses more, while DL receives discounts on products like C4R1, which it takes in larger volumes. Hanwha said its position has consistently been to set contract prices at fair market value. The two companies, which each hold a 50-percent stake in YNCC, remain at odds over how to move forward. Hanwha has approved an additional loan of 150 billion won (about $113 million) to YNCC. DL, meanwhile, has maintained that any financial support must be preceded by a clearer assessment of the company's financial condition and internal restructuring efforts. 2025-08-13 16:42:15

Majority of South Korean firms look to reenter Russian market once war ends SEOUL, August 12 (AJP) - Amid Russia's prolonged war against Ukraine, a majority of South Korean companies that previously operated in Russia hope to return to the market, a new survey suggests. According to a report based on the survey of some 528 companies and released on Tuesday by the Korea International Trade Association (KITA), some 79.2 percent of South Korean firms that halted exports to Moscow due to the war expressed their intention to return to the market. The main reasons cited were the potential for recovery in the Russian market and the desire to maintain relationships with existing buyers. The report also showed South Korea's exports to Russia peaked at $10 billion in 2021 before dropping to $4.53 billion in 2024, mainly due to war-related international sanctions. During the same period, the number of South Korean exporters fell sharply from 4,003 to 1,861. These sanctions raised the number of export items requiring specific approval to a staggering 1,431, encompassing not only strategic goods but also some non-strategic items. Firms that halted exports to Russia also struggled to find alternative markets, with only 37.2 percent of such companies have managed to enter other markets. More than half of the surveyed companies or 51.8 percent, remained optimistic about the recovery of the Russian market, saying that if uncertainties are resolved, Russia could once again become a viable strategic market. Nevertheless they cited several obstacles to returning to the market such as payment risks (69.9 percent), difficulties in logistics and transport (44.6 percent), and geopolitical instability (43.2 percent). For these reasons, companies urged the government to provide support related to sanctions. "Russia is a market we cannot afford to miss," said Yu Seo-kyung, a senior researcher at KITA. "It is important to come up with a trade-related roadmap based on recovery scenarios for the war," she added. 2025-08-12 15:01:54

Hyundai Steel signs deal for joint global CCUS hub project SEOUL, August 12 (AJP) - Hyundai Steel has signed a deal with several global steelmakers and related companies for a joint research project to identify hub sites for carbon capture, utilization and storage (CCUS), the company said on Monday. CCUS is a set of technologies that capture carbon dioxide generated during steelmaking, then either use it for various applications or permanently store it underground to prevent its release into the atmosphere. The project, led by global engineering and project management firm Hatch, aims to identify hub facilities capable of capturing and compressing CO2. The initial plan is to collect CO2 at onshore hubs before transporting it to offshore storage sites for long-term underground containment. A signing ceremony for the project was held in Singapore last Friday, with participants including Australia's BHP, U.S.-based Chevron, Japan's Mitsui & Co., and India's JSW Steel and AM/NS India, a joint venture between ArcelorMittal and Nippon Steel. Southeast Asia and northern Australia have been tipped as key candidate regions, with an 18-month study planned to explore the project's commercialization. If the project proves successful, Southeast Asia and Australia could secure large-scale CO2 processing infrastructure for Hyundai Steel and its partners, while South Korea's competitiveness in carbon reduction technology could gain momentum for further growth in the global market. A Hyundai Steel spokesman forecast, "The multi-consortium deal is expected to provide a valuable opportunity to explore various carbon reduction technologies including CCUS and expand the possibilities for achieving carbon neutrality. Collaboration with global market players will serve as an important stepping stone toward enhancing the sustainability of the steel industry." 2025-08-12 11:14:54

KHNP begins on-site survey for nuclear power plant project in Czech Republic SEOUL, August 11 (AJP) - Korea Hydro & Nuclear Power (KHNP) began the first stage of its project for building a nuclear power plant in Dukovany, Czech Republic by conducting an on-site survey with a launch ceremony last week. The year-long survey, scheduled to conclude by August next year, will examine the characteristics of the proposed construction site to provide essential data for the plant's design. The ceremony last Saturday was attended by KHNP President and CEO Hwang Joo-ho; Petr Zavodsky, CEO and Chairman of the Management Board of Elektrárna Dukovany II (EDU II), the Czech project subsidiary; Czech Minister of Industry and Trade Jozef Síkela; South Korean Ambassador to the Czech Republic Hong Young-ki; and executives from CEZ EP, the local survey contractor. Later in the day, in the nearby town of Trebic, KHNP also held events to extend its sponsorship under the town's regional council partnership program, which includes support for the local ice hockey team. KHNP has supported the Dukovany-based SK H.S.T. ice hockey team since 2018 as part of its efforts to build strong ties with the local community. "The on-site survey is the first stage of the project and the practical starting point for the APR1000 design," Hwang said. "It is a critical step to ensure the contract schedule is met, and we will carry out the survey thoroughly and systematically as planned." 2025-08-11 16:01:54

Third-largest South Korean ethylene producer on brink of going bust SEOUL, August 11 (AJP) - Petrochemical company Yeochun NCC (YNCC) is on the brink of default due to financial insolvency amid industry downturns. According to industry sources on Sunday, the country's third-largest ethylene producer is likely to go bust if it fails to secure 310 billion won (about $223 million) in operating funds by Aug. 21. The company has suffered prolonged losses due to an oversupply of ethylene feedstock from China. The joint venture was established in 1999 by Hanwha Group (Hanwha Solutions) and DL Group (DL Chemical), which hold a 50 percent stake each. Talks between the two shareholders to provide a lifeline to YNCC have begun, but they remain deadlocked over their differences. Hanwha's board of directors decided late last month to inject an additional 150 billion won (about $108 million) into YNCC as part of rescue efforts that also includes operational restructuring through production cuts. It believes that if it can secure a combined 300 billion won (about $216 million) along with DL Group, YNCC could avoid default and obtain sufficient funds to operate through the end of this year, when Korea Development Bank's foreign currency guarantees and asset-backed loans will be renewed. DL Group, however, reportedly insists that significant restructuring must come first before any loan can be considered. Since both shareholders already injected 100 billion won (about $72 million) each earlier this year, DL remains reluctant to provide further support. To save YNCC, both sides must reach a deal by this week. But prospects remain uncertain due to huge differences over ethylene supply prices and related cash flow concerns. YNCC has been cash-strapped since 2022, with net losses of 347.7 billion won (about $250 million) in 2022, 240.2 billion won (about $173 million) in 2023, and 236 billion won (about $170 million) in 2024, largely due to a prolonged glut caused by oversupply from China. The country's top two players in the petrochemical market, LG Chem and Lotte Chemical, are also struggling, having sold or liquidated assets to weather the downturn. LG Chem posted an operating loss of 90.4 billion won (about $65 million) in the second quarter of this year, while Lotte Chemical recorded an operating loss of 244.9 billion won (about $176 million), marking its seventh consecutive quarterly loss. "Major petrochemical companies' financial health is rapidly deteriorating due to mounting losses. If the government-led massive restructuring plan is not ready, measures such as electricity rate reductions for petrochemical industrial complexes in Yeosu and Ulsan may need to be implemented as soon as possible," said an industry watcher. 2025-08-11 13:45:14