Consolidation
Samyang Corporation, Samyang Holdings’ subsidiary, announced on Sept. 11 that the company will merge with Samyang Holdings’ other subsidiary, Samyang Genex. The merger ratio was 1:2.1791119, and date of the merger is scheduled to be Jan. 1, 2016.
A spokesperson for Samyang Group said, “The purpose of the merger is to maximize business competitiveness by creating synergy effects.” He also said that with this merger, the company seeks to strengthen financial stability and realize sustainable growth by creating more investment opportunities.
Once limited to the food and chemical sectors, the Samyang corporation is expected to reach the scale of economy in food after the merger with Samyang Genex, which specializes in the production of starch and food ingredients. In addition, the two companies can achieve sustainable growth by integrating research capabilities in the areas of chemicals and food. For instance, last year, Samyang Genex succeeded in producing isosorbide, a corn-made material to produce plastics.
Meanwhile, the Chinese market for AboutMe, Samyang Genex’s cosmetics brand, is also expected to quickly increase. To this end, AboutMe plans to utilize the existing local sales network of Samyang subsidiaries in China.
The sales of Samyang Corporation last year were 1.3551 trillion won (US$1.1637 billion), and the net income for the current term posted 30.5 billion won (US$26.2 million). Samyang Genex, on the other hand, recorded 3.948 trillion won (US$3.392 billion) in turnover, and 23.3 billion won (US$20.0 million) in net profits for the term.
The Group’s attempt at restructuring the company has been an on-going process. In 2013, Samyang Corporate incorporated Samyang EMS and Samyang Welfood to improve efficiency. Last year, the corporation merged with Samyangmilmax, a flour manufacturer, removed the PET bottle business segment, and launched a packaging business. Through the strategy of selection and concentration, Samyang seeks to consolidate the structure of the company.
Overview of Samyang Corporation and Samyang Genex
Samyang Corporation (will survive the merger)
Samyang corporate runs business units in food, chemicals, industrial fiber, and ion exchange resin. For the food sector, Samyang has an integrated food brand, Kyuwon, which specializes in the production of sugar, flour, and food processing. Samyang Corporation also runs a logistics company for food ingredients named ServeQ. As for the chemicals segment, Samyang focuses on engineering plastic (EP), fibers for industrial materials, electronic material polycarbonate, BPA, and high-purity terephthalic acid (TPA). Samyang is currently pursuing the development of new materials.
Samyang Genex (will not survive the merger)
Samyang Genex specializes in the production of starch, starch sugar, alcohol, and cosmetics. Samyang Genex has been involved in a wide range of segments including food, pharmaceuticals, paper, textiles, and cosmetics. For the first time in the starch industry, Samyang Genex has established a research institute and produced modified starch for paper. Also, it entered the cosmetics business through the brand “About US” and integrated its health and beauty segments.