CTK Acquires US OTC Manufacturing Plant... "Leaping Forward as a Global Beauty Hub"

CTK is poised to leap to the center of the global beauty market by acquiring a manufacturing plant capable of producing cosmetics and OTC products in North America.

Global beauty platform company CTK announced on the 2nd that it has decided to conduct a paid-in capital increase for its U.S. holding company, CTK USA Holdings, to acquire a corporation located in California that can manufacture cosmetics and OTC items. The total capital increase amounts to approximately 28 billion KRW.

CTK expects to fundamentally resolve the U.S. Food and Drug Administration (FDA) OTC approval issues through the acquisition of the U.S. OTC manufacturing plant. Due to increasingly complex regulations such as the Modernization of Cosmetic Regulation Act (MoCRA), CTK plans to provide U.S. market entry solutions to domestic and international brand companies, as well as domestic OEM and ODM companies, that are facing difficulties entering the U.S. market.

CTK judged that ODM companies with local production bases in North America will gain a competitive advantage, anticipating an increase in import tariffs in the U.S. Choi Chi-ho, head of CTK’s cosmetics division, stated, "This will create an opportunity to qualitatively elevate the K-beauty trend established in the U.S." He explained, "The main purpose of the acquisition is to secure a foothold that can increase accessibility to the U.S. market, where K-beauty is dominant, by supplying products compliant with OTC regulations to brand companies and providing specialized OTC contract manufacturing services to domestic OEM and ODM companies."

He added, "By producing client products locally, we can reduce tariff burdens and cut logistics costs through fulfillment services, thereby strengthening the competitiveness of K-beauty players in the North American market."

The U.S. cosmetics market is subject to different regulations than Korea. Products classified as functional cosmetics in Korea are regulated as OTC-exclusive cosmetics in the U.S., meaning they are treated at a level equivalent to pharmaceuticals. Manufacturers exporting OTC products to the U.S. must have facilities that meet stringent FDA certification standards and comply thoroughly with regulations. The OTC manufacturing plant CTK is acquiring has already completed FDA inspections and secured related facility certifications.

Choi Chi-ho emphasized, "The global cosmetics market is being reorganized around North America, and the core growth driver in the U.S. market is OTC," adding, "We will transform the plant into a specialized OTC factory by the first half of next year." He also noted, "Exports to Canada and Australia are possible without additional certification, contributing to the continuous market expansion and leadership of K-beauty."

CTK regards the OTC business as a key global growth engine and has been strengthening its business foundation by separately opening an OTC section on its global B2B beauty platform, CTKCLIP. It plans to provide sunscreen, color cosmetics containing SPF, wrinkle improvement, and whitening products?classified as functional cosmetics in Korea?tailored to the stringent U.S. OTC regulations, while enhancing its ODM expertise in the North American market.

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