SEOUL, KOREA - Samsung Total, a 50:50 joint venture between Samsung and France's Total established in 2003, is fast transforming itself into an oil refiner from a petrochemical company. By next year, its revenue from oil refining is expected to be more than that from petrochemical products. Behind its move to shift toward a refiner, it has made an unusual effort to save energy.
Son Seog-won, Samsung Total president, said, "We saved even a drop of oil coming out of the pipeline in making petrochemical products to lay the foundation for an oil refining business. For the past ten years, we have reduced the energy cost by 20-30 percent." The total energy savings for the past seven years were 148.4 billion won. In recognition of the energy-saving effort, Mr. Son won a gold tower order of industrial service merit on November 19 from the government.
The Samsung Group company produces benzene, paraxylene, and the like by refining condensate. Its refining division accounted for 23 percent of the total sales revenue with 861.3 billion won during the first half of this year. This is only a half of the petrochemical unit that produced styrene monomer and paraxylene (47%), but the situation will be different in the next year. In its No. 2 paraxylene plant built at the cost of 1.7 trillion won, the company expects that refined oil product sales would rise quickly.
Its capacity in gasoline and diesel is 4.3 million barrels and 8.0 million barrels a year, about 3-5 percent of the capacity for SK Innovation, Korea's No. 1 refiner. Due to the global supply glut in petrochemical products, Samsung Total's oil business is expected to increase its share for the time being. A company official said, "As the downturn in the petrochemical business will continue for years, the share of refined oil sales next year will rise to at least 40 percent in total."
Article provided by The Korea Economic Daily
