KCC Expands Synergy Through Global Silicon Business Integration

KCC Silicon, KCC Basildon, KCG Silicon Business Division and Other Silicon Subsidiary Shares Sold to Momentive

KCC Banpo Building.
Photo by KCC

[Asia Economy Reporter Kim Jong-hwa] KCC has restructured its silicon business by transferring its silicon subsidiaries to its U.S. subsidiary, Momentive Performance Materials (Momentive).

On the 6th, KCC announced that it would sell its silicon business subsidiaries, including KCC Silicon, established through a physical division on the 1st of last month, to Momentive. The companies subject to sale are KCC Silicon, KCC Basildon (KCC's UK silicon subsidiary), and the silicon business division within KCG (KCC's Guangzhou, China corporation). Since the sale occurs within the same corporate group, it will not affect consolidated financial statements such as sales figures.

Through this sale, KCC will transfer its directly owned silicon business subsidiaries under Momentive. The plan is to strengthen KCC's responsible management of Momentive and combine the capabilities of both companies to complete a balanced business portfolio. Upon completion of the sale, KCC will increase its shareholding in Momentive from the existing 50% plus one share to 60% (voting rights shareholding ratio).

KCC expects that by integrating its silicon business under the global silicon company Momentive, it will maximize synergy effects among affiliated companies. Practical synergies are anticipated in terms of cost optimization and securing cost competitiveness through economies of scale, expanding sales networks by utilizing silicon technology exchange and networks, and other aspects of the silicon business.

In particular, KCC has independently developed Korea's first silicon manufacturing technology and established an integrated production system from the basic silicon raw material monomer to secondary products (including sealants, RTV, LSR, HTV, etc.), demonstrating global-level technological capabilities in silicon manufacturing. Momentive, through acquiring shares in KCC Silicon, has secured an additional production base in the Asian region and laid the groundwork for new business expansion through strengthened technological cooperation.

A KCC official stated, "This sale is a measure to enhance the expertise of the silicon business division, which KCC has identified as a future growth engine, and to strengthen management efficiency," adding, "Through the complementary business portfolios of KCC and Momentive, we expect to establish competitiveness as a unified 'One company' in the global silicon market."

Meanwhile, Momentive is a global silicon manufacturer that KCC completed acquiring in May 2019 and incorporated as a subsidiary in January last year. It is considered one of the world's top three silicon companies alongside Dow (U.S.) and Wacker (Germany).

Momentive's business segments are broadly divided into three areas: functional additives, specialty products, and silicon raw materials and intermediates. It produces everything from silicon raw materials to secondary products in an integrated manner and is widely applied across various industries including electronics, automotive, cosmetics, healthcare, telecommunications, construction, and agriculture.