Newon to Discontinue Unprofitable Vacuum Deposition Equipment Business and Restructure Operations

On December 8, Newon announced that it will discontinue operations of its vacuum deposition equipment division, which has been a non-profitable business segment. The company plans to focus its resources on the rapidly growing health functional foods and household goods businesses.

The health functional foods and household goods business, which was incorporated through a merger last year, is now emerging as a core revenue driver. In October, Newon received approval from the Korea Exchange to change its business category, officially shifting its business structure to focus on health functional foods.

The equipment division has not achieved a recovery in sales or improved profitability for several years, due to deteriorating external conditions such as a slowdown in global smartphone demand, price competition from Chinese companies, and the expansion of the used smartphone market. As of September, the operating margin stood at -79.98%, with losses widening and increasing pressure on the company’s financial structure.

With the discontinuation of operations, the company plans to sequentially downsize the workforce and factories of the equipment division, and to dispose of assets such as equipment and land that can be sold. After the free after-sales service period for existing products ends, even essential personnel will be gradually reduced.

A Newon representative stated, "We determined that choosing and concentrating on high-growth core businesses is the most rational way to enhance company value," adding, "As fixed costs are reduced and business efficiency improves, we expect to see positive effects on our financial structure."

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