Chairman Kim Yoon of Samyang Group

Samyang Group has decided to incorporate Samyang Corp. and Samyang Genex to reinforce the competitiveness of the group’s food business unit. Samyang Holdings, the holding company of Samyang Group, announced Samyang Corp.’s merger with Samyang Genex on Sept. 11. The merger ratio of Samyang Corp. vs. Samyang Genex is 1:2.1791119 for ordinary shares and 1:1.4158270 for preferred shares. 

Samyang Holdings said the consolidation of the food business units of the two companies is expected to have synergic effects. “Samyang Corp. owns distribution networks for sugar and flour while Samyang Genex possesses distribution networks for starch and fructose,” a Samayng Group official said. He went on to say that the consolidation of the distribution networks of the two companies will remove inefficiencies and reduce logistics costs. 

“The combining of Samyang Corp.’s production facilities and business knowhow and Samyang Genex’s industrial bio technology prowess will enable the merged company to make feats in the industrial bio market,” the official noted. 

Samyang Corp. has food and chemical business units. The food business unit produces such food ingredients as sugar, flour, oils and fats. The chemical business unit produces engineering plastics used as sophisticated materials for automotive, electronic/electric and machine parts; ion exchange resins; and industrial fibers. 

Samyang Corp. chalked up 1.355 trillion won in sales and 30.5 billion won in net profit last year.

Samyang Genex, to be extinguished after the merger, produces a diverse range of high-quality products based on our innovative starch manufacturing technology and facilities, including glucose, starch syrup, fructose, general starch, modified starch, sorbitol, maltitol, and oligosaccharides. Samyang Genex has expanded its business portfolios to such high-tech business areas as life science as well as food business, pharmaceuticals, paper and cosmetics since 1985 when it fell into the hands of Samyang Group. 

Samyang Genex posted 394.8 billion won in sales and 23.3 billion won in net profit last year.

The merger was owed partly to Samyang Corp’s sagging food business, sources familiar with the matter said. Samyang Corp.’s food business unit saw sales fall to 23.4 billion won in the first half of this year, a 26.8 percent plunge from 32.7 billion won a year earlier. The food business unit found it difficult to maintain sales and market share due to the government policies of promoting foods with less sugar and the saturation of the domestic market. Samyang Corp.’s consolidation with Samyang Genex may be construed as making breakthroughs by diversifying business portfolios, they said. 

“The merger will allow the realization of the economy of scale in the food business, and the consolidation of the two companies’ chemical and food R&D capabilities will enable the diversification of business portfolios,” the Samyang Group official said. 

Samsyang Genex has succeeded in commercially producing isosorbide, an eco-friendly bio-plastic material. Isosorbide is a petrochemical material substitute that is used as a raw material for making plastics. Isosorbide is a 100 percent natural bio-material that is made using corn. The principle of the production of the material involves the process of extracting starches from corn and converting them into glucose and sorbitol. 

Samyang Corp.’s global network will likely encourage Samyang Genex’s existing business units to make inroads into foreign countries. In particular, the merger will allow Samyang Genex to translate into action its integrated health & beauty brand, “About Me,” to enter the Chinese market. To solve complicated external skin problems, About Me focuses on improving health with functional health foods and complementing the ingestion of such functional foods with cosmetics, thus providing healthy and beauty solutions.

Samyang Group’s headquarters (Photos: Samyang Group)