Samsung General Chemicals and Samsung Total Petrochemicals were finally renamed to become part of Hanwha Group. As the two companies were launched as Hanwha Group subsidiaries, Hanwha Group now has the nation’s largest petrochemical sector worth a total sales of 19 trillion won (US$17.69 billion) and an opportunity to re-enter the oil refining industry in 16 years.
On April 30, Samsung General Chemicals and Samsung Total Petrochemicals held extraordinary shareholders meetings and board meetings and changed the names to Hanwha General Chemicals and Hanwha Total Petrochemicals.
Hanwha said, “We will create the environment in where Hanwha General Chemicals and Hanwha Total Petrochemicals are independently managed as much as possible. Also, we will maintain the present employment contracts, such as employment guarantee and benefits, for the existing employees.” The employees of both companies will receive an average of 60 million won (US$55,850) in compensation per person from Samsung Group.
As Hanwha General Chemicals and Hanwha Total Petrochemical launched, Hanwha now runs the petrochemical business with an annual sales of 19 trillion won (US$17.69 billion). In terms of the petrochemical sector alone, the group ranks first in the domestic market, followed by LG Chem and Lotte Chemical.
Merged with both companies, the ethylene production of Hanwha will increase to 2.91 million tons, which is the ninth highest in the world. It means more production higher price competitiveness.
In addition to ethylene, the company will have various product groups, including polypropylene, paraxylene, styrene monomer, diesel, and jet aircraft fuel. As the company can also use various raw materials, such as naphtha, condensate and LPG, it can now compete with North American and Middle Eastern petrochemical companies boasting low priced raw materials.
It is also meaningful for Hanwha to be able to re-enter the oil refining industry in 16 years. Hanwha established Kyung-in Energy and started the oil refining business in 1970. However, Hanwha sold the company to Hyundai Oilbank, then Hyundai Refinery, right after the Asian financial crisis in 1999. The output of Samsung Total Petrochemicals this year is expected to reach 500,000 tons of gasoline, 1 million tons of diesel, and 2 million tons of jet aircraft fuel.
In the New Year’s address this year, Group Chairman Kim Seung-youn also said, “The petrochemical sector is the business that both previous chairman and I have put efforts into and know and do well. Hanwha Group will make every effort to develop its petrochemical sector as one of the global top five in the future.”
Meanwhile, Hanwha Group is planning to complete the deal of Samsung Techwin and Samsung Thales in the first half of this year.
Once the group takes over the two companies, Hanwha Group will see the sales growth in the defense sector from 1 trillion won (US$930.84 million) to 2.6 trillion won (US$2.42 billion) and become a leading company in the domestic defense industry.