UpdateKorea truckers strike threatens deliveries

12 June 2008 06:30  [Source: ICIS news]

By Brian Myung

SINGAPORE (ICIS news)--South Korea’s land transport union has urged its members to strike for better wages in a move that will affect the petrochemical sector by halting the movement of goods over roads.

Workers in the southern coast (Yeosu) on Thursday joined their counterparts in the west (Daesan) who have been on strike for the last two days.

The Transportation Industry Nationwide Labour Union of Korea told all of its members to go on strike, a source from Yeochun Naphtha Cracking Centre (YNCC) said on Thursday.

“With union members in east coast [Ulsan] planning to start their strikes on Friday, the Union has held a press conference to announce a nation-wide strike as of 13 June,” the source said in Korean.

Demanding lower diesel prices and higher wages, truckers were on the streets and blocking roads as the Union negotiates with the government for lower diesel prices and higher transportation fees, the source added.

In Daesan in particular in the west, strikes were heard to have started since Tuesday and the situation was heard to be getting worse without truckers to deliver the goods and instead blocking the roads.

“If this is not solved soon, it would be too difficult to operate our plants, because some of the feedstock required cannot be delivered to our plant,” said a cracker operator in the Daesan area.

An Ulsan-based acetic acid producer said that petrochemical makers on the western coast [Daesan] were seriously affected by the transportation problems caused by the strike and if the strikes continued for a week, the respective companies may be forced to shut their plants.

Companies operating plants in Daesan are LG Chem, Lotte Daesan Petrochemical and Samsung Total Petrochemicals.

In Yeosu, strikes had just started on Thursday morning and companies had yet to feel a direct impact on their operations.

“We are operating at 100% and the strike has not affected our production yet, but tomorrow, nobody knows. To my knowledge, negotiations (between the drivers union) and the government are ongoing,” a polypropylene (PP) producer there said.

While companies in Yeosu will not have much problem with moving ethylene, propylene and other feedstock chemicals as most of them are integrated with neighbouring plants via pipelines, others may be more affected. 

Polymers and monomers producers would be the most affected as polyethylene (PE) and polypropylene (PP) distribution would be impossible soon, a producer said.

A lengthy strike may force downstream firms to reduce production rates and lessen demand for upstream products. This may lead to the shut down of most plants and even the naphtha crackers, a cracker operator in the area said.

A TDI producer in Yeosu said that his deliveries for the domestic market has stopped since late last week due to the transport workers’ strike. His plant, however, was running as it had only recently restarted after a turnaround.

Another TDI maker in Kunsan in the west – where the strike just started – said 20 of his containers were stuck at the factory and were waiting to be delivered to the port.

GS Caltex, Daelim Industries, LG Chemical, Honam Petrochemical, Hanwha Chemical, Polymirae, Yeochun Naphtha Cracking Centre and Kumho P&B Chemicals have plants in Yeosu.

“In the east coast, a majority of truck drivers are not involved but some of them are asking for government subsidies on fuel costs amid ongoing negotiations with the government,” an acetic acid producer in Ulsan said.

A PP producer in Ulsan added that strikes would begin on Friday but the company has already made arrangements to ensure its deliveries are not affected.

Hanwha Chemical Corp, Isu Chemical, Korea Kumho Petrochemical Co (KKPC), Korea Petrochemical Industry Co (KPIC), KP Chemical and SK Energy are among those operating in Ulsan.

Steve Tan, Chow Bee Lin and Helen Lee contributed to this article

To discuss issues facing the chemical industry go to ICIS connect

By: Brian Myung
65 6780 4359

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly