S Korea’s Cheil plans aggressive electronic chem expansion

16 September 2004 06:27  [Source: ICIS news]

SINGAPORE (CNI)--Cheil Industries, the founding company of South Korea’s Samsung Group, is planning an aggressive expansion of its electronic chemical materials (ECM) division over the next two years, CNI was told on Thursday.

A company official said the company was hoping to grow the sales of its ECM division to Won450bn ($393m/Euro323m) by 2006 from Won9bn last year, with the forecast increase based on the introduction of new products and an increase in capacity and operating rates.

The official said Cheil was targeting Won160bn in sales from its ECM business this year, with the bulk of that contribution coming from recently introduced materials.

Its ECM products include light guide panels (LGPs) for liquid crystal displays (LCDs), epoxy moulding compounds (EMC), electrolytes for rechargeable batteries, and electromagnetic interference shields (EMS) for mobile telephones.

Cheil launched its first LGP line in November 2003 and doubled its LGP capacity to 10 000 tonne/year with the launch of a new line in August. LGPs are produced from polymethyl methacrylate (PMMA) resin.

As it is part of the Samsung Group, most of Cheil’s ECM output is to be taken up by Samsung Electronics, which is one of the world’s top producers of LCD screens, mobile phones and other consumer electronics.

The official said that Cheil was expecting sales of Won2.24trn this year which would rise to around Won3.00trn by 2006. The company had sales of Won2.09trn in 2003.

Operating profit is expected to increase to Won180bn this year and Won330bn in 2006, up from Won165bn in 2003.

The official would not give details on new ECM projects, citing Korea Stock Exchange (KSE) fair disclosure rules. But he said several projects were planned and would be announced over time. He also noted that capacities were not as meaningful for ECM products, as much of the increase in output could be attained by adding shifts to existing plants.

Cheil’s chemicals division also produces materials for its electronics division. These include speciality acrylonitrile butadiene styrene (ABS) resins, impact and temperature resistant polystyrene (PS), polycarbonate (PC) and PC/ABS compounds.

The official said that Cheil would be scaling back its formerly core textiles division and would be making the ECM business its main focus. He said that the company would slowly reduce the output of its textiles business as the ECM business developed.

Cheil’s textile business is currently more focused on natural textiles such as silk, linen and wool than it is on synthetic materials, he noted. However, the official also added that the company would still try to grow its fashion business with aggressive marketing campaigns in China.

He said there was a possibility that the textile and fashion divisions would be merged, although he did not speculate on whether they may be spun off.

By: Chris Myrick
+44 208 652 3214

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