By acquiring Samsung’s two chemical units, Hanwha Group has become the nation’s largest petrochemical group. Hanwha now has 21.173 trillion won worth assets as of the end of 2014, surpassing the conventional front leader, LG Chem, which has 18.127 trillion won worth assets.
Hanwha Group completed a process to take over Samsung General Chemicals and Samsung Total as the chemical units of Samsung were formally transferred to Hanwha family members on April 30. Samsung General Chemicals and Samsung total held board of directors and extraordinary shareholders’ meetings, respectively, and decided to change their names to Hanwha General Chemicals and Hanwha Total.
Kim Hee-chul, 51, Hanwha senior executive vice president and head of Hanwha’s Post Merger Integration Team, was elected as the new president and CEO of Hanwha Total. Hanwha General Chemicals is jointly run by Hanwha Total President Kim and Hong Jin-soo, 55, senior executive vice president. The latter headed the Management Support Office of Samsung General Chemicals. Hong had been working for Samsung General Chemicals for 30 years after he entered the company in 1985 as a freshman employee, and he was promoted to senior executive vice president at last year’s regular reshuffle.
He has been credited with successfully completing the post merger integration following a deal between the conglomerates. CEO Hong is to be virtually in charge of the overall management of Hanwha General Chemicals, while Kim will be charged with enhancing synergetic effects and efficiency between the two companies from the two business groups.
Hanwha Group will let the former Samsung companies have management leeway for a considerable period of time and guarantee former Samsung employees same compensation and employment.
Hanwha’s appointments of the CEOs of Hanwha General Chemicals and Hanwha Total has capped Hanwha Group’s process to hand over the chemical units of Samsung Group within five months of Hanwha agreeing on the deal to take over four petrochemical and national defense units of Samsung Group last November. Hanwha will see ethylene production rise from 1.91 million tons (ranked 17th in the world) to 2.91 million tons (9th). The group, which was involved in production of ethylene, has its product portfolios expanded to include such chemicals as polypropylene, paraxylene and styrene monomer.
Hanwha Group plans to focus on chemistry for integration rather than outward growth following the M&A. The group failed to reach agreements on consolation money during negotiations with representatives of the emergency measure committee until their shareholder’s meetings. The group now has to grapple with an issue of translating its “DNA” into the new family member companies.
Some industrial experts said that Hanwha General Chemicals, primarily producing purified terephtalic acid (PTA), might be consolidated with Hanwha Total, a maker of propylene, paraxylene and other products, since they do not have the same product portfolios.
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