Two Major Chemical Giants to Shut Down, Sell Again

Recently, two major chemical giants announced the closure and sale of assets.

First of all, Solvay.

Solvay will terminate selected product lines at its Bad Wimpfen plant to support the company's transformation. Specifically, the production of organic compounds related to trifluoroacetic acid (TFA) will cease in early 2026, and the production of certain inorganic compounds, including hydrogen fluoride, will gradually stop by the end of 2026.

Due to this adjustment, Solvay will cease production of TFA and all its derivatives across the group in early 2026, which will result in a reduction of approximately 100 positions at Bad Wimpfen.

A key element of the new investment in the Bad Wimpfen plant is the establishment of a state-of-the-art NocolokⓇ paste and coating facility, while relocating the NocolokⓇ technology center and production operations fromGarbsenTransfer toBad Wimpfen Bad WimpfenBecome the global center for innovation and customer applications, consolidating Solvay's global leadership in the automotive brazing field. These measures will lead toGarbsenReduce approximately 40 net positions andIt is expected to cease operations in 2028.

Solvay plans to allocate approximately 250 million euros for restructuring costs and strategic investments around 2026, and remains committed to Germany as an important industrial base.

Secondly, the South Korean SK Group.

According to foreign media reports, South Korea's leading conglomerate SK Group is selling its entire 35% stake in the Sinopec-SK (Wuhan) Petrochemical Company, a joint venture with Sinopec. Sources say the transaction is expected to be conducted at a book value of approximately 819.3 billion won (around 4.17 billion yuan).

Sino-Korean (Wuhan) PetrochemicalFounded in 2013, with a total investment of 3.3 trillion won, it was a symbol of SK's "China Localization" (China Insider) strategy. This joint venture factory can produce 3.2 million tons of general chemicals annually, including 1.1 million tons of ethylene, with peak annual sales reaching approximately 10 trillion won.

However, the joint venture has accumulated losses of over 1 trillion Korean won. The main reason behind this is the frenzied expansion of ethylene production capacity in China, leading to excess capacity and intensified price competition.

According to the information available, SK Group is one of South Korea's largest integrated energy and chemical companies and the second-largest conglomerate in South Korea, with three main industries: energy and chemicals, information and communication semiconductors, and marketing services. It owns several well-known subsidiaries, including SK Innovation (originally engaged in refining, now expanded to petrochemicals, lubricants, battery manufacturing, etc.), which has merged with SK E&S, SK Geo Centric (high-performance polymers and eco-friendly materials such as biodegradable plastic PBAT, chemical recycling of plastics, etc.), and SK Hynix (a global leader in memory chips).

Except for this withdrawal,SK Group is also significantly reducing and exiting other bulk commodity chemical businesses.On August 26, according to the Korea Economic Daily,The SK Group is accelerating its restructuring to secure new capital, with its subsidiary SK Innovation planning to sell its overseas businesses through a bundled transaction. This mainly includes the ethylene acrylic acid (EAA) and polyvinylidene chloride (PVDC) businesses acquired from Dow in 2017 for $370 million, as well as the functional polyolefins business acquired from Arkema in 2020 for $317 million.

On the other hand, SK Group is advancing towards the "ABC" strategy, focusing on three key areas: Artificial Intelligence (AI), Batteries, and Chips. It has pledged to invest 8.2 trillion Korean won in these future growth sectors by 2030.

This also aligns with the global context.The landscape of bulk chemicals is gradually entering an oligopolistic competition stage, transitioning from supply-driven to market demand-driven trends.