South Korea’s Tongkook up for sale - source

15 November 2007 04:42  [Source: ICIS news]

KoreaBy Hong Chou Hui

SINGAPORE (ICIS news)--Tongkook Corp, South Korea’s second largest polyethylene terephthalate (PET) producer has been put up for sale and may have new owners by early next year, a company source said on Thursday.

“The company has been having cash flow problems and that’s why it was put for sale last month. The new owner will probably be known by January 2008,” the source from Tongkook said.

He added that the buyer was a Korean company which was not involved in the PET or polyester business, and Tongkook would be renamed with no changes made to operations.

Market sources said that more than one company was interested in buying Tongkook.

“The Korean buyer is most likely to be Hyosung. KyungNam Textile is their second option. We heard that another non-Korean company is also interested in Tongkook,” a Taiwanese trader of PET and polyester fibres said.

KyungNam Textile is a textile and yarn producer in South Korea.

Officials from Hysoung and KyungNam could not be reached for comment.

Tongkook’s PET bottle chip plant in Gumi, which is located near the port of Busan in South Korea, has an annual capacity of 280,000 tonnes.

The company also has two polyester yarn plants and one spandex yarn facility in Gumi.

According to the company’s website, Tongkook has a capital of Korean Won (KRW) 38bn ($41.6m) and annual sales of KRW747.8bn.

The company does not intend to reduce output and was offering PET chips at $1,350/tonne FOB (free on board) Korea for November shipment.

Prices of PET bottle chips from Korea were assessed at $1,310-1,360/tonne for the week to 9 November on the back of talk of firmer offers from producers and traders, according to global chemical markets intelligence service ICIS pricing.

($1 = KRW914.60)

By: Hong Chou Hui
+65 6780 4359

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