KOLMAR Korea Acquires Cosmetic Container Manufacturer 'Yeonwoo'

Products of Yeonwoo.

[Asia Economy Reporter Moon Hyewon] Kolmar Korea Group is acquiring Yeonwoo, the No. 1 cosmetics container company in South Korea.

According to the investment banking (IB) industry on the 14th, Kolmar Korea agreed to acquire a total of 55% of Yeonwoo's management shares for 286.4 billion KRW and signed a stock purchase agreement (SPA) the day before. Once the deal is finalized, Yeonwoo will be incorporated as a subsidiary of Kolmar Korea.

Kolmar Korea explained the purpose of the acquisition as "expanding the cosmetics business value chain and creating synergy."

Headquartered in Seo-gu, Incheon, Yeonwoo is a company that manufactures plastic cosmetics containers such as pump-type, tube-type, and sample-type containers. It was the first in South Korea to develop a cosmetics dispenser pump that dispenses a consistent amount of product each time the pump is pressed. Yeonwoo has its own research institute and holds over 800 intellectual property rights (IP) related to mold design and prototype injection molding. Its main product, the pump-type container, currently holds a 40% market share domestically, demonstrating its dominance. The company has secured about 400 clients including Amorepacific and LG Household & Health Care, and actively exports overseas through the US PKG Group and the European Quadpack Group. Yeonwoo's sales last year were 287 billion KRW, operating profit was 29.9 billion KRW, and operating profit margin was 10%.

Through this acquisition, Kolmar Korea plans to internalize Yeonwoo's container manufacturing technology to improve margins and additionally secure high-quality overseas clients of Yeonwoo, which has a high export ratio. In the cosmetics business, packaging such as containers accounts for about 30% of the cost, and Kolmar Korea expects to reduce costs by utilizing Yeonwoo's technology accordingly.