Hanwha sets sights on acquisitions

Hanwha Group is strengthening its competitiveness in petrochemicals, solar power and advanced materials by acquiring other companies as it restructures to prepare for future growth.

The nation’s 10th-largest conglomerate said yesterday that its affiliate Hanwha Chemical has acquired a 50.7 percent stake in KPX Fine Chemical for 42 billion won ($40 million). KPX Fine Chemical in 1982 became the first Korean company to produce toluene diisocyanate (TDI), a polyurethane material, and makes 75 percent of its revenue from exports.

“This M&A is one of our business-restructuring efforts to reinforce our core ability in the manufacturing sector,” the group said in a release. “Hanwha has a vision for our core businesses to become global top players by 2020 through business restructuring under a ‘select and focus’ strategy.”

Hanwha Chemical said that the acquisition of KPX Fine Chemical will allow the company to boost its businesses that require chlorine, which is used for the company’s polyvinyl chloride (PVC) and TDI products.

In addition, the company said that the acquisition will increase operations at its three TDI plants, which were scheduled to stop producing by 2015. Hanwha Chemical said that it can collect 400 billion won in revenue per year by keeping the plants on the line. It also plans to use a 160,000-square-meter (39-acre) plot of land owned by KPX Fine Chemical for expansions.

Hanwha Chemical has been trying to increase its liquidity by issuing $340 million worth of global depository receipts in April and sold its pharmacy affiliate Dream Pharma to the U.S.-based multinational pharmaceutical company Alvogen for 194.5 billion won last week.

“By improving our financial health, we are considering additional M&As in order to boost our petrochemical business,” Hanwha said.

In its solar power business, Hanwha Group acquired a 40 percent stake of Australia-based residential solar power provider Empyreal last week.

Through this acquisition, Hanwha said it will take over the company’s market in Australia and look to expand into energy-saving businesses.

“We are actively reviewing acquiring solar power retailers in Japan, Germany and the Middle East, while participating in solar power plant operation,” the group said. “We want to solidify our status in the solar power business, which is now delivering profits.”

Hanwha said that it is also looking to purchase foreign companies in automobile or film materials in a bid to makes its affiliate Hanwha Advanced Materials more competitive.

The conglomerate in June sold Hanwha L&C’s construction materials unit to Morgan Stanley Private Equity for 300 billion won, and its existing materials unit changed its name to Hanwha Advanced Materials.

“Hanwha Advanced Materials is looking to expand its business by developing carbon-based composite materials for automobiles, while having nanoprinting and coating technology for electronic materials,” the group said.

Hanwha Group said that the major restructuring was ordered by its Chairman Kim Seung-youn, who has been out of management due to health issues since 2012. In his New Year’s message, Kim ordered the group to evaluate its future growth starting from zero and to make its business structure efficient by looking ahead at least 10 years.

BY joo kyung-don [kjoo@joongang.co.kr]