Kim Dong-gwan Accelerates Hanwha Business Restructuring

Solution Acquires Golf Course Business
Accelerates Entry into Electronics Industry
Boosts Expansion of Business Portfolio

Kim Dong-kwan, President and CEO of Hanwha Solutions. (Photo by Hanwha Solutions)

[Asia Economy Reporter Moon Chaeseok] Kim Dong-kwan, President of Hanwha Solutions, is leading the restructuring of the business portfolio and is actively reshaping the company. Hanwha Solutions plans to acquire the golf course business of Hanwha Hotels & Resorts and spin off NxMD, a new business organization for electronic materials and components, into a separate corporation.

According to the Financial Supervisory Service on the 21st, Hanwha Solutions announced on the 17th that it will acquire golf course operation business, land, and buildings worth approximately 72 billion KRW from Hanwha Hotels next month. It will acquire land and buildings in Jirisan worth 10.4 billion KRW, and the Jade Palace golf course operation business and Jade Garden arboretum operation business worth 61.5 billion KRW each. This is to secure cash liquidity necessary for increasing new investments. Hanwha Hotels announced that it will spin off on May 1st and establish a 100% subsidiary, Hanwha Next, while also reorganizing its equestrian business division.

Hanwha Solutions stated that the purpose of the acquisition is "to expand business areas and secure premium development sites." A Hanwha official explained, "The hotel will focus on mass resort business, while Solutions will handle premium businesses such as golf courses and arboretums." This business expansion by Solutions aligns with the steady acceleration of business restructuring since Kim’s appointment as president in March 2020, following the integrated launch of Hanwha Solutions in January 2020 through the merger of Chemical, Q CELLS & Advanced Materials, and others. In April last year, Solutions absorbed the asset development divisions of its subsidiaries Hanwha Galleria and Hanwha Urban Development. The plan is to conduct leisure businesses alongside petrochemicals, solar energy, advanced materials, and urban development centered on Solutions.

Along with expanding the leisure business, Solutions has decided to accelerate its entry into the electronics sector. It announced on the 17th that it will participate in a paid-in capital increase by NxMD, investing 105.8 billion KRW. NxMD, a subsidiary of Solutions, operates businesses in electronics, electrical, mechanical, communication equipment, and industrial products. NxMD is set to acquire Samsung Electro-Mechanics’ communication module business for about 7.1 billion KRW, and it is analyzed that Solutions’ participation in the capital increase is to secure funds for this acquisition. Solutions plans to inject funds into NxMD in two phases, next month and in July.

The independent management of NxMD is said to have been led by President Kim. This restructuring focuses on high-growth businesses beyond renewable energy sectors such as solar and hydrogen, broadening Solutions’ business portfolio. Solutions recorded a consolidated operating profit of 738.3 billion KRW last year, a 24.26% increase from the previous year, but the solar division posted an operating loss of 328.5 billion KRW. This was due to sharp rises in prices of key raw materials such as wafers, silver, and glass, as well as increased logistics costs caused by higher maritime freight rates. Regardless of the fundamental strength of the business, solar performance can be volatile due to external factors, highlighting the need for business diversification at Solutions. President Kim’s prompt response is regarded as a key reason for this strategic move.

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