Kumho Petrochemical Group to overcome economic slowdown through strategic agility

Kumho Petrochemical Group has unveiled its plans to maintain a strong business and continue with its stable earnings despite concerns over the economic slowdown this year.

The plan comes as the recession's shadow looms over all economic players due to prolonged supply chain risks stemming from geopolitical issues as well as moves toward an unprecedentedly steep contraction of global liquidity. But Kumho Petrochemical Group is preparing to leap forward, turning the crisis into opportunity by equipping itself with strategic agility, comprising insight, intellect and flexibility, based on the group's stable business structure and financing.

Despite global uncertainties, Kumho Petrochemical plans to continue with its growth strategies for its Core, Base and Growth business sectors announced last year. For the Core business, it will strengthen market dominance in Solution Styrene Butadiene Rubber (SSBR) for its tires and latex products. The Base sector, meanwhile, will focus on diversifying sales destinations for synthetic resins and expanding the high-value-added products line as well as the energy business while taking climate change into account. The Growth sector will prioritize enhancing the competitive edge of carbon nanotubes (CNT).

All of the plans will be executed organically, based on detailed visions announced by the group including digital transition and new business development.

Kumho P&B Chemicals will continue the Hydrogenated Bisphenol A (HBPA) project and complete the expansion of its epoxy resin production capacity by 60,000 tons by the fourth quarter of this year, strengthening its foothold as the global top epoxy producer.

Kumho Mitsui Chemicals is currently investing in the expansion of its methylene diphenyl diisocyanate (MDI) production capacity by 200,000 tons, including the introduction of green technology. As it includes technology for treating and recycling wastewater and byproducts generated from MDI production, it is expected to enhance price competitiveness as well upon completion in the first half of 2024.

Kumho Polychem succeeded in making a turnaround last year based on the profitability of synthetic rubber EPDM. It is on its way to expanding EPDM production capacity by 2024 as it prepares for a continuous demand increase. This year, it plans to focus on the development of high-functioning EPDM to enter the new market.

Kumho Petrochemical Group is also bolstering its environmental, social and corporate governance (ESG) strategies, moving beyond coping with climate change to build the foundation for fundamentally sustainable growth. On top of setting up the value chain by advancing into the plastic waste recycling business last year, it is considering ways to reflect the eco-friendly needs of customers in its products.

For financial stability, Kumho Petrochemical is closely monitoring economic indices. It is trying to minimize potential risks by assessing priorities in investment based on supply and demand in the market as well as cash flow. Its debt ratio, which stood at 72.6 percent in 2019 even before the group's record-high earnings, fell further to 59.7 percent as of the end of 2021. The company is working to ensure that it can cope with any potential financial uncertainty caused by the global economic slowdown.

Based on strong fundamentals, Kumho Petrochemical Group plans to accelerate and nurture its future mid- to long-term businesses. With the rise of EVs, synthetic rubber for tires, synthetic resins to make cars lighter, and CNT for secondary batteries are all spotlighted for growth potential. (Advertorial)