'First petrochemical restructuring' partnership pact signed — FTC chair: 'Pay on time, honor trade ties'

H&L Advanced, the first integrated company formed under the government-backed petrochemical industry restructuring, has agreed to pay its suppliers within 10 days of each billing cycle and to maintain existing trade relationships even if some facilities halt operations during the restructuring process.

The agreement aims to reduce trade uncertainty for suppliers during the restructuring and prevent the burden from being passed on to them.

The Korea Fair Trade Commission announced Monday that it signed the mutual-cooperation agreement with H&L Advanced and its suppliers at HD Hyundai Oilbank's Daesan factory in Seosan, South Chungcheong Province.

H&L Advanced is the first integrated company formed under the petrochemical industry restructuring program, launched Sept. 1 through the absorption merger of Lotte Daesan Petrochemical — the Lotte Chemical Daesan factory — into HD Hyundai Chemical.

The agreement is the first mutual-cooperation pact concluded since the launch of an integrated company under the petrochemical restructuring. It was drawn up through voluntary consultations between H&L Advanced and its suppliers.

Key provisions cover improved payment terms, guaranteed trade stability during the restructuring process, and support for suppliers' capacity to adapt to future industry conditions.

H&L Advanced agreed to pay suppliers within 10 days of each of its two monthly billing cycles, using cash or cash-equivalent instruments, with early payment around public holidays. The current Subcontracting Act sets a 60-day payment deadline.

The company also agreed to maintain trade relationships with suppliers even if some facilities suspend operations during the restructuring. It will not unilaterally terminate contracts or halt transactions with suppliers in ongoing trade relationships, and pledged to negotiate in good faith over any requests for unit price adjustments stemming from reduced transaction volumes.

H&L Advanced will also provide education and consulting to help suppliers strengthen their capacity to respond to ESG and carbon neutrality requirements. The aim is to enable suppliers to build their own competitiveness and adapt to the post-restructuring industry environment.

Fair Trade Commission Chairman Ju Byung-ki said the industrial ecosystem cannot run on the strength of a single large company alone. "It has been possible because countless suppliers have been there — maintaining equipment, hauling raw materials, and keeping worksites safe," he said.

He added that trust emerges only when payments are made on time and at fair prices, and when commitments to trade relationships are honored. "That accumulated trust will come back as the strongest competitive edge," he said.

The commission said it plans to maintain ongoing dialogue with the industry to ensure the agreement does not remain a one-off gesture but leads to genuine improvements in trade practices and sustainable cooperation across the sector.