Hu M&C Focuses on Growth with Vietnam Plant in Full Operation

Huons Group's healthcare packaging materials specialist, Hu M&C, has begun expanding its future growth engines and business areas as its medical container plant in Vietnam enters full-scale operation.

According to the industry on September 11, Huons Group's first overseas production base and Hu M&C's Vietnamese subsidiary, "Hu M&C Vina," began operating its production lines in earnest from the second quarter of this year, marking the start of its role as an overseas manufacturing hub.

HuM&C Vietnam Corporation. Huons Group

Vietnam Plant Completed, Full-Scale Search for New Clients

The Vietnam plant, located in Thai Binh Province, covers approximately 14,900 square meters and is expected to produce about 60 million vials and 40 million cartridges annually.

Hu M&C is making multifaceted efforts to ensure stable plant operation, such as actively recruiting and training local staff. In addition, the company is leveraging its increased production capacity from the new Vietnam plant to drive sales growth, attending numerous global exhibitions to aggressively seek out new clients.

The company explained that if sales within Vietnam increase in the future, it will consider establishing a separate sales corporation for domestic sales in Vietnam. Going forward, the company plans to maximize local production efficiency to secure price competitiveness and continuously seek collaboration opportunities with global pharmaceutical and biotech companies.

Synergy effects from collaboration among affiliated companies are also anticipated. Hu M&C has completed United States Food and Drug Administration (FDA) Drug Master Files (DMF) registration for all ampoule and vial products related to the seven types of local anesthetics approved by Huons in the United States. Accordingly, the company expects that as Huons' sales to the United States increase, sales of high value-added products such as ampoules and vials will continue to grow.

In the cosmetics business division as well, Hu M&C is strengthening its sales capabilities and expertise. Last year, Hu M&C acquired the cosmetic packaging materials business and assets of Yuil Industry in Incheon, including Rubycelle puffs and sponges. Based on this expansion of its business areas, the company continues to broaden its client base and expand the growth of its cosmetics business division.

Hu M&C recorded stable growth in the second quarter of this year, accelerating improvements to its business structure. Consolidated sales for the second quarter reached 13.4 billion won, a 22% increase year-on-year. Sales for the first half of this year totaled 26 billion won, up 12.8% compared to the same period last year.

Both the glass and cosmetics divisions showed steady growth. As the conflict within the medical community eased, the domestic order environment began to recover, and the cosmetics packaging materials business acquired from Yuil Industry last year was successfully integrated, resulting in the full-scale realization of synergy effects.

Second Quarter Sales Up 22%... Full-Scale Enhancement of Shareholder Value

Hu M&C is also accelerating its efforts to enhance shareholder value through restructuring its financial structure. On June 24, the company resolved at an extraordinary general meeting to implement a 5-to-1 stock consolidation, completing the process on August 5. As a result, the number of listed shares decreased from about 49.04 million to 9.8 million, with the revised listing completed on August 20.

In addition to the stock consolidation, Hu M&C also resolved to transfer capital reserves to retained earnings to offset accumulated losses and improve its financial structure, thereby securing distributable profits for dividends.

If dividends are paid by reducing capital reserves, shareholders will be eligible for tax-free dividends on the corresponding amount. As part of this so-called "capital reduction dividend" shareholder return policy, the company also expects that value enhancement through treasury stock purchases will become possible.

The holding company, Huons Global, is also actively supporting efforts to enhance shareholder value. Huons Global announced in May that it had purchased about 400 million won worth of Hu M&C shares on the open market. By increasing its stake in subsidiary Hu M&C and stabilizing the share price, the company aims to enhance shareholder value.

Huons Global's stake in Hu M&C increased from 57.09% to 57.92%. Huons Global plans to continue actively supporting Hu M&C so that it can achieve sustained growth as a member of the Huons Group.

Image of Huons Group headquarters. Huons Group

Meanwhile, on August 13, Hu M&C appointed Lee Chungmo as its new CEO through an extraordinary general meeting and board meeting, reorganizing its management structure. CEO Lee has a proven track record in the food and healthcare sectors, having previously served as CEO of Huons Foodience (now Huons N) and Food Assemble.

CEO Lee stated, "Based on my diverse experience and background within Huons Group, I will lay the foundation for growth and improve our business structure. In particular, I will do my utmost to improve performance and drive sustainable growth, leveraging our overseas production base."