Unicem Makes Quantum Leap with Golf Amid Auto and Handbag Recovery... "Confident in Turnaround"

Automotive and Handbag Sectors Enter Growth Phase
Opening of Cascadia CC at End of August Reflects in Operating Profit

The turnaround of Unichem, a leather manufacturing specialist company, is anticipated. This is because the demand for Unichem products is increasing as the automotive and handbag markets, which are Unichem's main sales channels, recover after the COVID-19 endemic. Additionally, with the opening of Cascadia CC, a commercial non-membership golf course, at the end of August, operating profits are expected to increase significantly.

According to the Financial Supervisory Service's electronic disclosure on the 24th, Unichem recorded sales of 22.5 billion KRW in the car seat segment in the first quarter of this year, a 29.8% increase compared to the same period last year.

Unichem is a leather manufacturing specialist company that produces and sells car seat fabrics and handbag fabrics. For car seats, it supplies to Hyundai and Kia Motors. The car seat segment accounts for 60% of Unichem's total sales. For handbags, it supplies to well-known brands such as COACH, TUMI, KATE SPADE, and MARC JACOBS.

Unichem's sales stagnated at around 120 billion KRW for about three years after the COVID-19 outbreak in 2020 due to a shortage of automotive semiconductors that halted car production and sluggish handbag sales. During this period, operating profit also decreased from 17.9 billion KRW in 2019 to 3.3 billion KRW last year.

The company explained, "The decrease in operating profit was due to a 70 billion KRW investment in modernizing outdated facilities and expanding infrastructure, an increase of 4.3 billion KRW in depreciation expenses, a 3.2 billion KRW pre-opening operating loss from its subsidiary Unigolf & Resort, and losses caused by reduced yield during the adaptation period to new machinery and facilities."

The growth in car seat segment sales in the first quarter of this year is attributed to the easing of the automotive semiconductor supply shortage since the fourth quarter of last year. In fact, car seat segment sales rebounded with a 43% growth compared to the same period last year in the fourth quarter.

Not only car seats but handbag sales also increased by 10%, from 6.1 billion KRW in the third quarter to 6.8 billion KRW in the fourth quarter of last year. If this trend continues, total sales and operating profit this year are expected to show meaningful growth compared to the past three years.

Furthermore, Unichem's key new business, the golf business, is also expected to significantly contribute to this year's performance. Currently, Unichem's subsidiary Unigolf & Resort is conducting pilot rounds at Cascadia CC, a high-end luxury golf course.

Cascadia CC is a high-end golf and resort facility located near Namchuncheon IC in Bukbang-myeon, Hongcheon-gun, Gangwon Province. It features a luxury commercial non-membership golf course, villas, condos, an infinity pool, cabanas, a sky bridge, Michelin-starred restaurants, and a pet hotel.

Planned as a 27-hole public course, Cascadia CC is being developed with themes of stone, tree, and water, maximizing the natural terrain. The Stone Course is surrounded by exposed schist rock formations that act as a natural backdrop to the greens, conveying the grandeur of nature. The Tree Course, set against a primeval forest, offers a phytoncide shower experience, allowing players to enjoy their rounds as if forest bathing. The Water Course, featuring a signature seven-tier waterfall with a 350-meter circumference listed in the Guinness World Records, provides a dramatic panoramic view over the cascading water during play.

Notably, Cascadia CC reflects the owner's mindset of creating a premium public course that rivals world-class courses and prestigious membership golf clubs by preserving the natural terrain rather than prioritizing cost savings or construction convenience.

An Unichem official stated, "When Cascadia CC officially opens at the end of August, the operating losses recorded before the opening will turn into operating profits. Since these results will be reflected in Unichem's performance, a turnaround is expected in the future."