Bukwang Pharm, Decides on 100 Billion KRW Scale Capital Increase

Expansion of Facility Investment:
"Establishing a Stable Supply System and Securing Competitiveness of Manufacturing Facilities"
Investment in R&D:
"Operating Funds to Strengthen In-House Research Capabilities"

Exterior view of Bukwang Pharmaceutical headquarters. Photo by Bukwang Pharmaceutical

Bukwang Pharmaceutical held a board meeting on the 28th and resolved a paid-in capital increase worth 100 billion KRW, announcing related details. Bukwang Pharmaceutical stated that the funds raised through this capital increase will be used for expanding existing manufacturing facilities, acquiring new manufacturing equipment, and operating funds to activate research and development.

Bukwang Pharmaceutical has set a second growth goal of "becoming a top 20 pharmaceutical company by 2030." To achieve this, the company plans to secure competitiveness in manufacturing facilities to establish a stable supply system while strengthening its in-house research capabilities for the launch of differentiated and competitive new products.

This capital increase will be conducted through a rights offering followed by a general public subscription for any unsubscribed shares. The new share allocation will be based on June 2, and the final issue price will be determined on July 3. Subsequently, employee stock ownership, existing shareholders, and general subscriptions will follow, with the new shares expected to be listed by July 28.

Expansion of Facility Investment: "Establishing a Stable Supply System and Securing Competitiveness of Manufacturing Facilities"

Bukwang Pharmaceutical will invest the funds raised through this capital increase in ▲expanding existing manufacturing facilities and introducing equipment ▲acquiring new manufacturing facilities. This aims to secure stable pharmaceutical supply and mid- to long-term growth drivers. The company recognizes that recent continuous stockout issues have significantly impacted profitability and intends to secure insufficient production capacity to resolve existing supply instability.

Through this facility investment, Bukwang Pharmaceutical aims to maximize production process efficiency and improve quality control levels by introducing the latest solid dosage production facilities and automation systems.

Additionally, the company plans to use the investment funds to acquire new manufacturing sites such as other companies' factories. This is intended to supplement the company's insufficient production capacity and secure a diverse product portfolio centered on fields designated as future strategic product groups. Furthermore, the enhanced production capacity and secured sales capabilities will be leveraged to expand into CDMO (Contract Development and Manufacturing Organization) business and promote exports.

A representative of Bukwang Pharmaceutical stated, "The Ansan plant, built in 1985, has never undergone fundamental expansion, reconstruction, or remodeling, resulting in a very outdated condition. With the funds from this capital increase, we plan to introduce the latest production facilities to improve process efficiency, reduce production costs, and establish a system capable of stably supplying high-quality products."

He added, "Through this facility investment, we aim to maximize the utilization of existing manufacturing facilities and expand annual production capacity to ensure there are no issues in supplying essential pharmaceuticals for public health. We also expect an increase in sales and operating profit through the growth of potential sales lost due to supply shortages and the expansion of the portfolio and business areas."

Investment in R&D: "Operating Funds to Strengthen In-House Research Capabilities"

Bukwang Pharmaceutical plans to invest the funds raised through this capital increase in R&D operations as well. The company intends to promote the strengthening of its relatively neglected in-house research capabilities by investing in new product development, improvement research of existing formulations, synthetic new drug research, introduction of external development projects, clinical development, and research and development facilities.

In particular, Bukwang Pharmaceutical aims to produce various high value-added products secured through research and development by utilizing the expanded production capacity from facility investments and factory acquisitions. To realize this, the company plans to accelerate research on improved new drugs and first generics using the drug delivery system research capabilities of its research institute to secure new products.

Lee Jae-young, CEO of Bukwang Pharmaceutical, said, "Through this paid-in capital increase, Bukwang Pharmaceutical will gain an opportunity to grow as a genuine hub in the pharmaceutical and bio sectors within the OCI Group. We will expand our new drug pipeline to the global market and strengthen brand competitiveness, starting a 'second growth' on a different level than before. We will also continuously pursue efforts to enhance shareholder value, including share buybacks and cancellations, and an active dividend policy including interim dividends, using the profits generated."

He continued, "We judged that a capital increase is the most efficient and appropriate method for Bukwang Pharmaceutical's 'quantum jump.' The fruits of this will definitely be shared with shareholders. We ask for broad understanding and warm encouragement for the management and board of directors' decision on this capital increase for the company's mid- to long-term growth."

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