Completion of Dongwon Group's Governance Restructuring... Dongwon Industries Launches New Holding Company

Dongwon Industries Completes Merger with Dongwon Enterprise
Dongwon Industries Becomes Business Holding Company... Management Efficiency
Board Meeting Held on 2nd... Merger Registration Completed
Simplified Governance Structure Enables Faster Decision-Making

[Asia Economy Reporter Song Seung-yoon] Dongwon Group has completed the merger of Dongwon Enterprises and Dongwon Industries, which has been underway since April this year, finalizing the restructuring of its governance.

On the 2nd, Dongwon Industries held a board meeting and plans to complete the merger registration through a merger completion reporting general meeting. Since April, Dongwon Group has been promoting the merger of its holding company, Dongwon Enterprises, and the intermediate holding company, Dongwon Industries. On September 14, Dongwon Industries held an extraordinary shareholders' meeting and approved the merger contract with the existing holding company, Dongwon Enterprises. The new shares to be issued due to the merger amount to 6,318,892 shares and will be additionally listed on the 16th. At this board meeting, Lee Myung-woo, CEO of Dongwon Industries, and Park Moon-seo, CEO of Dongwon Enterprises, were appointed as heads of the business division and holding division, respectively. Outside director Kim Joo-won was also newly appointed as the chairman of the board.

After the merger, the existing holding company Dongwon Enterprises will be incorporated into Dongwon Industries, which will become the holding company of Dongwon Group. Subsidiaries of the existing holding company, as well as grandchild companies such as Starkist and Dongwon Loex, will all come under Dongwon Industries and become subsidiaries. Dongwon Group transitioned to a holding company system in 2001 by establishing Dongwon Enterprises.

Until now, Dongwon Group's holding company Dongwon Enterprises controlled five subsidiaries including Dongwon Industries, Dongwon F&B, and Dongwon Systems, while the intermediate holding company Dongwon Industries held 21 subsidiaries such as Starkist and Dongwon Loex, resulting in a somewhat complex governance structure. However, this merger is expected to simplify the overlapping governance structure, enable faster decision-making, and increase management efficiency. The aim is to allocate resources efficiently and strengthen expertise in each business area. Through this, the group plans to establish a decision-making structure that can quickly respond to external environmental changes and crises and promote medium- to long-term growth.

Additionally, by directly controlling stable profit-generating affiliates such as Dongwon F&B, Dongwon Systems, and Dongwon Construction Industry, the group's annual operating profit is expected to expand from about 260 billion KRW to around 510 billion KRW, significantly increasing liquidity. The group will also work on improving the efficiency of human and material resource allocation across the entire group. By effectively integrating Dongwon Enterprises' holding company operation know-how with Dongwon Industries' business capabilities, the inefficiencies caused by the intermediate holding structure will be improved.

Going forward, to smoothly promote new businesses by each affiliate, the group will establish a rapid decision-making system and execute bold investments. First, it plans to continuously expand the eco-friendly smart salmon farming business. Dongwon Industries is investing approximately 200 billion KRW to establish an eco-friendly smart salmon farming complex in Yangyang-gun, Gangwon Province, aiming to secure sustainable marine resources. Through the land-based salmon farming complex, Dongwon Industries plans to produce 20,000 tons of salmon annually and achieve annual sales of 200 billion KRW. To become a 'Total Protein Provider' offering comprehensive protein foods, the group is expanding into the livestock sector by successively acquiring Korea's largest livestock wholesale online mall 'Geumcheon Meat' and B2C livestock processing specialist 'Sejung.'

Dongwon Systems' secondary battery materials business is also expected to gain momentum. Leveraging its expertise and technological competitiveness as Korea's first manufacturer of tuna cans, Dongwon Systems is recently expanding its cylindrical battery can business for secondary batteries. To meet the increasing demand for battery cans, Dongwon Systems plans to expand its manufacturing scale for secondary battery cans. The acquisition and merger of MKC, which possessed core technology, laid the foundation for market entry, and the company is actively investing in new plant expansions. Currently, it has the capacity to produce about 500 million cylindrical battery cans annually. Furthermore, this merger is expected to resolve investment constraints caused by the Fair Trade Act's 'holding company activity restrictions,' accelerating the establishment of smart ports in the logistics sector.

A Dongwon Industries official said, “We plan to draw the future blueprint of each affiliate centered on Dongwon Industries,” adding, “We will complete a concrete growth roadmap together with shareholders while promoting synergies among affiliates at the group level.”

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