KCC Establishes New Corporation for Silicon Business Spin-off

Establishment of 'KCC Silicon (tentative name)' to Enhance Business Expertise and Strengthen Management Efficiency

[Asia Economy Reporter Kim Jong-hwa] KCC is establishing a specialized subsidiary to enhance expertise in its silicon business division and strengthen management efficiency.

On the 17th, KCC held a board meeting at its headquarters in Seocho-gu, Seoul, and resolved to spin off the silicon business division to establish a new subsidiary tentatively named 'KCC Silicon.' KCC will retain 100% of the shares of the newly established company through a simple physical division, whereby KCC remains a listed company, and the new subsidiary KCC Silicon will be unlisted. The division date is set for December 1.

This division aims to improve business expertise and strengthen management efficiency by separating the silicon division from KCC’s businesses, which include building materials, coatings, silicon, and materials. Considering company and market conditions, KCC plans to enhance competitiveness and improve financial structure through potential share sales, external investment attraction, strategic business alliances, and technological cooperation as needed.

Through the company split, KCC has established a governance system that enables swift and specialized decision-making tailored to each business division’s characteristics. This will allow rapid response to market environment and regulatory changes, and by focusing capabilities on specialized business areas, it is expected to increase corporate and shareholder value.

Since the division is conducted via a simple physical split, there will be no changes in the ownership shares or shareholding ratio of the largest shareholder due to the split, and the division itself will have no impact on the consolidated financial statements.

KCC has long focused on high value-added fields centered on silicon as its core business. In 2003, it independently developed silicon manufacturing technology for the first time in Korea, realizing the localization of silicon raw materials that had previously been entirely imported. To date, it remains the only company in Korea to produce organic silicon raw materials and first- and second-stage products in an integrated process.

In 2011, KCC acquired Basildon, a UK-based organic silicon product manufacturer, opening new avenues for its silicon business. In 2019, it further strengthened its competitiveness as a global leader by acquiring Momentive Performance Materials (hereafter Momentive) in the United States.

Through the spin-off of the silicon business division, KCC is reviewing various ways to create synergy with Basildon and Momentive, and by launching a specialized silicon company with secured expertise, it plans to accelerate expansion in the global market. The remaining company will solidify its leading position in the building materials and coatings industry and continue stable growth through ongoing investment.

A KCC official stated, "We aimed to realize business advancement and establish management efficiency through specialization of the business division to grow the silicon business as a core business." He added, "The establishment of this new company lays the foundation for becoming a world-class silicon company."

This content was produced with the assistance of AI translation services.