Dong-A Pharmaceutical Co. is preparing to change its corporate structure to that of a holding company by splitting it up into two separate firms, one as a holding company and the other a new legal entity centered on ETC, as well as an affiliate OTC, the company said on Oct. 23.

Officials of the company said the strategy is to separate the operation into OTC and ETC like multinational pharmaceutical firms have been doing in order to make decision making faster and more professional.

The plan is being pushed on the occasion of the company’s 80th anniversary to build a new growth base to cope with the changing business environment of the pharmaceutical industry in Korea, the company said in explaining the planned change to its corporate structure. One of the key purposes of the plan is to expand into the medical equipment and medical service sectors to secure a new growth area, they said.

Under the plant, the holding company will take up, among other areas, the U-healthcare, healthcare technology, and human genome areas, investments in new businesses, and new affiliate will be formed will take charge of the development of new products, manufacturing, marketing, and product distribution, among others, they said.

The business affiliate will take charge of the development and marketing of new drugs at its R&D facility and for manufacturing for the holding company and marketing of its new products to earn extra income, the officials said.

The newly created firm is likely to boost its profits by getting rid of low-margin businesses and boost its share price by taking into consideration profitability ahead of other concerns. 

The board of directors meeting on Oct. 23 approved the new plant and will launch the new holding company on April 12 next year as well as wrap up the launch of the holding company and reform of its affiliates within the same time frame.

The pharmaceutical company also announced its third quarter results along with the corporate restructuring plan.

For the quarter, the company’s sales revenue came to 243.2 billion won, roughly the same as the 241.9 billion won in the same quarter in the previous year, with operating profit amounting to 29.1 billion won, up 900 million won YoY, with net profit of 20.4 billion won, down 900 million won YoY.

By sector, the ETC sector posted sales of 103.9 billion won, down 23.5 percent YoY; sales of Bacchus at 34.9 billion won was an increase of 86.2 percent YoY; while sales in the OTC sector came to 51.3 billion won, up 9.8 percent YoY, the company said.

Other sectors, including medical equipment, posted 6.8 billion won in sales in the Q3, down 13 percent YoY, medical equipment sales were up 3.3 percent YoY at 10.3 billion won, and exports increased 95.1 percent with 26.9 billion won.

In the meantime, Dong-A Pharmaceutical Co. won the Silver Award of the 2012 Korea Advertisement Grand Award for its ad for Bacchus titled, “Live as 000 in Korea.” The award ceremony took place at the Crystal Ballroom of Lotte Hotel in Jamsil, Seoul, on Oct. 23.

The Korea Advertisement Rally Korea Ad Grand Award, established in 1987 by the Korea Ad Association, which celebrated its 26th anniversary this year, is one of the most publicly acknowledged awards picked by consumers in Korea. The ad award for this year went through three screenings including the internet, preliminary, and official screenings on such factors as creativity, creativity in display methods and harmony, nature of commodity expression, and correctness of the expression of the ad concept, among others.

Exe.Director Choi Ho-jin of Dong-A Pharmaceutical Co.’s Communication Office said the ad for Bacchus has not been colorful and flagrant, but has always been calm and refined in reflecting Korean trends of just telling simple everyday life story. The ads will continue to encourage people sharing happiness and hardships in together in its contents, the manager said.