Hwaseung Corporation to lay the foundation for sustainable growth centered on profitability of Hwaseung Material Absorption and Merger

Hwaseung Corporation (CEO Heo Seong-ryong), a global listed company in parts and chemicals, announced on the 24th that it will merge with Hwaseung Materials, a global chemical company and its wholly owned subsidiary. Hwaseung Corporation plans to strengthen its sales capabilities based on Hwaseung Materials' high value-added material mixing technology capabilities, thereby securing the competitiveness of existing businesses and expanding new eco-friendly future businesses. Its strategy is to secure core competitiveness for sustainable growth centered on profitability in the future.

The merger will be carried out in a small-scale merger in which parent company Hwaseung Corporation merges 100% subsidiary Hwaseung Material, and the two companies will sign a merger agreement on the 25th and complete July 1 as the merger date after final approval by the board of directors next month.

Hwaseung Materials is a 100% subsidiary of Hwaseung Corporation, which achieved sales of 297.4 billion won and operating profit of 12.7 billion won last year, and is a global leader in the rubber and elastic material industry that has grown based on technology accumulated for more than 40 years, and is the No. 1 domestic market share in the CMB (Carbon Master Batch), Thermo Plastic Elastomer (TPE) market.

In March 21, Hwaseung Corporation separated its domestic automobile business through a division of personnel and established Hwaseung R&A separately. After the division, Hwaseung Corporation, the surviving corporation, focused on stabilizing and specializing its investment sector, including subsidiary management, and its own industrial rubber product business. In an extension of this, the merger plans to strengthen the foundation for sustainable growth by combining Hwaseung Corporation's management capabilities and technology sales capabilities such as management, risk, and investment based on the high value-added material technology capabilities of Hwaseung Materials.

Through this merger, Hwaseung Corporation aims to strengthen the company's profitability and gain a differentiated competitive advantage in the mid- to long-term by pursuing business growth in terms of products/customers/markets based on its core capabilities centered on high value-added materials.

Specifically, in terms of products, the company plans to strengthen its capacity to develop new materials such as eco-friendly ones by integrating the value chain, and expand sales of products using high value-added materials. In particular, ▲Up-Cycling Material ▲Non-Halogen Flame Material ▲Energy Power Generation and Energy Storage (ESS) Material such as Wind Power and Solar Power ▲ Antibacterial and Bio TPE Material ▲Next-generation defense and marine materials, etc., will focus on R&D capabilities on high-function, eco-friendly and biological materials.

In addition, on the customer side, the company plans to promote customer diversification in the energy, aviation, and electronics sectors as well as existing industrial goods, strengthen its global cooperation network through cooperation and alliances, and spur new overseas market entry. Finally, in terms of the market, it plans to actively pioneer new product markets such as eco-friendly based on its capabilities in high value-added materials to minimize external market impact and secure profitability.

An official from Hwaseung Corporation said, "We decided to merge through the board of directors to improve the competitiveness of Hwaseung Corporation this year, which marks the 70th anniversary of its foundation. In order to create a 'strong company' for sustainable management, which is the company's internal goal this year, we will secure core competitiveness for profitability-oriented sustainable growth based on high value-added material capabilities." <The End>