Kumho Petrochemical "Triple Focus on Sustainable Growth Transformation: ESG, Core Business, and Future Business"

19-page 'Mid- to Long-term Growth Strategy' Document Published
"Strengthening Shareholder-Friendly Policies... Utilizing Treasury Shares and Other Resources for Future Businesses"

Baek Jong-hoon, CEO of Kumho Petrochemical. (Photo by Kumho Petrochemical)

[Asia Economy Reporter Moon Chaeseok] Kumho Petrochemical announced that it aims to achieve annual sales of 12 trillion KRW by 2026, focusing on three pillars: ESG (Environmental, Social, and Governance) management, core businesses, and future businesses. The company declared the start of a 'great transformation' to build a sustainable growth system by contributing to society as a carbon-neutral company rather than a high carbon-emission company.

On the 11th, Kumho Petrochemical revealed a 19-page document titled "Mid- to Long-term Growth Strategy for Sustainable Management," presenting a blueprint for future industrial strategies and shareholder policies. The most notable point is the simultaneous achievement of annual sales of 12 trillion KRW by 2026 through ESG management and a 29% reduction in greenhouse gas emissions by 2030 compared to BAU (Business As Usual) projections. The company selected three core strategies to achieve these goals: establishing an ESG-leading business system, fostering core businesses, and securing new future growth engines.

The ESG management strategy is broadly summarized into "expanding eco-friendly businesses" and "strengthening internal control organizations." The proportion of eco-friendly businesses relative to sales is planned to gradually increase from about 7% in 2018 to 16% in 2026 and 30% in 2030. Based on current operations, the company plans to expand the share of synthetic rubber for eco-friendly vehicle tires and bio-based raw material synthetic rubber, while simultaneously developing biodegradable NB latex. Additionally, activities of the ESG committee within the board of directors will be strengthened. This is to implement the ESG vision announced last September, "Let’s Act, Advance, and Accelerate for ESG!" An internal control system from an ESG perspective will be established to enhance the execution power of ESG strategies and to focus on inspecting any unusual matters.

The company plans to invest approximately 3.5 to 4.5 trillion KRW to foster core and future businesses. In core businesses, the goals include maintaining market leadership in synthetic rubber such as NB latex, entering the global top 5 in epoxy, and doubling the global market share in fine chemicals. Efforts will continue to maximize profitability in existing mainstay businesses such as synthetic resins and phenol derivatives. Among future businesses, growth engines will be sought in eco-friendly vehicles, bio and eco-friendly materials, and high-value specialty areas. The company will actively nurture its own growth businesses such as carbon nanotubes (CNT) and bio-material products. The establishment of a CVC (Corporate Venture Capital) is also planned.

Shareholder-friendly policies will be strengthened. In particular, over the next 2 to 3 years, 25-35% of separate net income will be used as shareholder return funds through cash dividends, treasury stock acquisition, and cancellation. Furthermore, the company plans to implement policies that share improvements in profits and business value based on business structure improvements with shareholders. According to Kumho Petrochemical, the total amount of shareholder returns and dividend payout ratio have steadily increased over the past five years. Kumho Petrochemical also stated that it plans to use its treasury shares held over the next 10 years as investment funds for strategic alliances and securing new growth platforms.

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