INCHEON, KOREA - A paraxylene plant being built by SK Incheon Petrochem is in danger of being closed. The Seo-gu district office in the city of Incheon decided the company had violated the city's building code in numerous instances. The construction of the 1.6-trillion-won plant is currently 90 percent complete.

 

On January 6, an official of the Seo-gu District Office said the district would send a notification to halt the construction on the grounds that it found SK Incheon Petrochem had built the plant in excess of the area previously permitted with the city authorities.

 

The SK Group company has since last year shifted its focus on chemical and synthetic fibers away from oil refining that has seen its profit margin eroded. The company said the plant's closure would incur 54 billion won of loss a month in sunken cost, including labor cost, equipment rental, and storage space rental. Even including opportunity cost from losses of long-term oil contracts, the monthly loss would be in the range of 100 billion won.