Lotte Chemical Titan sale sparks hope but challenges remain

LOTTE Chemical Titan Holding Bhd (LCT) is back in the spotlight over reports that its South Korean parent, Lotte Chemical Corp, is reviving plans to sell the loss-making Malaysian petrochemical producer, while also pursuing a partial divestment of its Indonesian operations.

Following the reports, LCT shares rallied around 30% to 40.5 sen on Wednesday before paring gains, and traded at 35 sen at the time of writing on Thursday.

But for investors who have held the stock since its listing in 2017, the latest excitement is another chapter in a long and painful saga. The shares were offered at RM6.50 each but have since lost much of their value.

LCT subsequently told Bursa Malaysia that its parent was considering “various strategic measures”, but no decision had been made.

While a change in ownership could bring fresh capital and a new strategy, industry conditions remain difficult.

Petrochemical margins are weak and excess capacity continues to weigh on the region.

China is also on track to add more petrochemical capacity, although at a slower pace following the Middle East crisis, one research firm notes.

Still, LCT could attract a buyer because of its sizeable assets in Malaysia and Indonesia. A new owner would gain an established presence in the region, while Indonesia remains a growing market where domestic petrochemical supply is below demand.

Low utilisation also leaves room to improve output and efficiency.

However, LCT has remained loss-making despite revenue more than doubling in the second quarter of financial year 2026 (FY26), helped by its Indonesian LINE project, which is a large integrated petrochemical complex in Cilegon.

The rally may reflect optimism over a potential sale, but with operating rates guided at only 60% to 65% in FY26, any buyer will still have a tough task turning the business around.