Kolon to invest $94 mn in industry film JV with SK Microworks

South Korea’s major chemical materials producer Kolon Industries Inc. is set to invest 129.6 billion won ($94.2 million) to establish an industrial film joint venture (JV) with SK Microworks Co. to regain ground in the sector dominated by Chinese rivals.

Kolon said on Thursday its board of directors decided to spin off its polyethylene terephthalate (PET) business and establish a JV with SK Microworks, an industrial film producer owned by domestic private equity firm Hahn & Co.

Kolon agreed to take an 18% stake in the JV with the investment, while SK Microworks, the world’s No. 4 industrial film producer, will hold the rest, according to Kolon’s filing to a regulatory filing.

Hahn & Co. acquired the industrial film business of SKC Ltd., a chemical materials unit of South Korea’s No. 2 conglomerate SK Group, for 1.6 trillion won in 2022 and changed its name to SK Microworks.

TO REGAIN GROUND

The two companies aim to strengthen their competitiveness in the industrial film sector and expand their shares in the global market through the JV.

“We expect the PET film business to take another leap through the strategic partnership with Hahn & Co.,” said a Kolon official. “The JV will improve its global competitiveness based on the two companies’ technology and industry experience.”

Kolon has been downsizing its industrial film business amid weak demand and growing competition against Chinese rivals.

The company plans to focus on its mainstream business such as aramid, the lightweight reinforced fiber with tensile strength five times stronger than iron of the same weight with high heat resistance and low cutability, while enhancing its competitiveness in future industries such as hydrogen, secondary battery and eco-friendly solutions.

Write to Hyung-Kyu Kim at khk@hankyung.com
 
Jongwoo Cheon edited this article.