S Korea’s Samsung sale of chemical firms ‘undervalued’: consultant

By Chow Bee Lin

SEOUL (ICIS)–South Korean conglomerate Samsung Group’s sale of its chemical assets to Hanwha Corp was “undervalued”, citing heavy investment made in their operations, Chemical Market Research Inc (CMRI) CEO Jong Woo Park said at an industry conference on Thursday.

Samsung Group announced on Wednesday plans to sell stakes in Samsung General Chemicals and defence firm Samsung Techwin to Hanwha for a total of won (W) 1,900bn. The asset transfer will include the group’s stakes in joint ventures Samsung Thales and Samsung Total Petrochemicals.

“Samsung’s sale at 1.9 trillion won is undervalued. I thought it should have been five to six trillion won,” Park said in a keynote speech delivered in Korean at the CMRI Petrochemical Conference.

Park said that in the case of Samsung Total, an investment of W10,000bn was made for its refinery and petrochemical complex.

Samsung Total is a joint venture between Samsung General Chemicals and French energy firm Total.

The buyer, Hanwha, has polyvinyl chloride, polyethylene and chlor-alkali, solar energy, biopharmaceuticals and nanotechnology operations, according to the website of Hanwha Chemical.

“Hanwha wants to be a major petchem company. It’s a good idea in the long term – it’s worth a try, but it’s a tremendous risk,” he said.

Samsung Total Petrochemicals’ operations are centered in Daesan, while Hanwha has petrochemical operations mostly located at Yeosu and Ulsan in South Korea, with some production units at Ningbo in China, according to ICIS data. (Please see table below)

The CMRI Petrochemical Conference is being held in Seoul on 27-28 November.

Samsung Total Petrochemicals’ Daesan ops

(capacity in tonnes/year)

Source: ICIS

Additional reporting by Pearl Bantillo

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections