Police help S Korea producers in PP, PE delivery

17 June 2008 11:08  [Source: ICIS news]

SINGAPORE (ICIS news)--Some polyolefins producers in South Korea have delivered cargoes to their key customers in the domestic market through non-union transport companies under police protection, company sources said on Tuesday.

"We are delivering cargoes to our key local customers using non-union truck companies and the deliveries are made under police protection," sources at LG Chemical and Polymirae said.

"But the volumes are very small because there are not many non-union truck companies," the Polymirae source added.

Commercial activities in South Korea had almost ground to a halt due to a transport strike, which started last Friday.

LG Chemical produces around 1.07m tonnes/year of polyolefins at Yeosu and Daesan and Polymirae runs a 630,000 tonne/year PP plant in Yeosu.

SK Energy delivered around 30 containers each containing 17 to 19 tonnes of polyolefins to its container yard at Ulsan port this week through non-union truck companies under police protection, a company source said, adding that it did not know if the cargoes would be shipped out as planned.

Hyosung which operates a 280,000 tonne/year PP plant at Ulsan also delivered some cargoes through non-union transport companies, a company source said.

"Last night, we moved four containers to the container yard at Ulsan port and received a few empty containers at our plant, but we didn’t request for policy protection because we believe that will hurt the feelings of the union workers," the source said.

Hyosung shipped out eight containers of block copolymer grade PP from Ulsan port to China, Japan and Pakistan on Tuesday as planned, he said.

The strike was not as serious at Ulsan as it was at other ports such as Pusan, South Korea’s oldest port, the Hyosung source said.

"The Pusan port is still operating but probably at a very slow pace because (we understand that the container yard is almost full," he added.

Three other key producers namely Honam Petrochemical, Samsung Total and Daelim Industrial did not engage the service of non-union transport companies, company sources said.

A source at Korea Petrochemical Industrial Co said it was not moving cargoes to the port through non-union transport companies, but that he wasn’t sure if the company was delivering to the domestic markets with non-union trucks.

Honam operates polyolefins plants in Yeosu and Daesan that have a combined capacity of 930,000 tonnes/year of PP and 830,000 tonnes/year of PE, Daelim runs a 400,000 tonne/year PE facility in Yeosu, and KPIC operates a 810,000 tonne/year.polyolefins facility at Ulsan.

Hanwha and GS Caltex could not be reached for comment.

South Korea is a major polyolefins producer with a capacity of around 4.5m/year tonnes of polyethylene and 3.8m tonnes/year of polypropylene, exporting to various markets including China and South America.

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By: Chow Bee Lin
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