[Report] From Ballpoint Pens to Lipstick... Monami Bets on K-Beauty Amid Delisting Crisis

First Look Inside the 22.2 Billion Won Cosmetics Factory
Operating at 20 Percent Capacity, Losses for Three Consecutive Years
Aiming for Profitability by 2028

It takes just over an hour by car from Yangjae Station in Gangnam-gu, Seoul. Upon entering the Monami Cosmetic factory located in Yongin Techno Valley, Gyeonggi Province, lip tints, eyebrow products, and sun sticks could be seen moving continuously along automated equipment. Factory workers in white dustproof uniforms were busy transferring products into containers and closing cosmetic lids, while on one side of the production line, cosmetic containers to be supplied to domestic and overseas clients were stacked up.

Monami, a stationery company famous for the “153” ballpoint pen, has transformed itself into a cosmetics company.

On the 24th, sun stick products are being produced on the production line at Monami Cosmetic factory located in Techno Valley, Cheoin-gu, Yongin-si, Gyeonggi-do. Photo by Jaehee Kwon

The Monami Cosmetic factory visited on the 24th serves as the outpost for Monami’s cosmetics business, which the company has chosen as its future growth engine. Monami Cosmetic is a wholly owned subsidiary established in 2023 after Monami spun off its cosmetics business unit. Completed in 2022 at a cost of 22.2 billion won, the factory covers a total floor area of approximately 10,200 square meters and integrates manufacturing, filling, packaging, and logistics functions in one location. Its annual production capacity reaches 45 million units (CAPA). In addition to lip and eye makeup, the factory can also produce cushions, foundations, and suncare products.

However, despite its impressive production facilities, the business results remain lackluster. In the first quarter of this year, Monami Cosmetic posted sales of 1.9 billion won and a net loss of 1.6 billion won. Although sales more than doubled compared to the same period last year, the figure is still modest.

Park Kyunghyun, CEO of Monami Cosmetic, stated, "Currently, the factory operates at about 25% capacity. Our goal is to increase this to around 50% by the end of the year by securing more domestic and international clients." He added, "We expect to reach the break-even point once annual sales exceed 18 billion won, and we are targeting a turnaround in profitability by the first half of 2028."

On the 24th, CEO Kyunghyun Park is giving a greeting at the Monami Cosmetic factory located in Technovalley, Cheoin-gu, Yongin-si, Gyeonggi-do. Photo by Jaehee Kwon

The reason Monami is betting on the cosmetics business, even at the cost of operating losses, is due to sluggish performance in its core stationery business, compounded by the risk of being delisted from the stock market. Monami, established in 1967 by the late Honorary Chairman Song Samseok, is Korea’s number one stationery company. However, its recent performance has been on a decline. Consolidated sales fell for three consecutive years, from 149.5 billion won in 2022 to 131 billion won last year. Operating profit also turned negative, falling from 6.2 billion won in 2022 to a loss of 2.3 billion won in 2023, with the loss widening to 5.9 billion won last year. In the first quarter of this year, the company recorded sales of 32.8 billion won and an operating loss of 2.7 billion won.

The stock price has also been plummeting. At the beginning of the year, shares traded at around 1,900 won, but as of the 24th, they have dropped to the 1,200 won range. Market capitalization has shrunk to 22.9 billion won as of the 24th. A bigger problem is the growing possibility of delisting due to strengthened listing maintenance standards on KOSPI. From July, the Korea Exchange will tighten management criteria for companies with a market cap below 30 billion won. Based on its current market cap, Monami does not meet the new standard set by the exchange. This means the company desperately needs a new growth engine to boost corporate value.

Monami’s choice to enter cosmetics is closely related to this background. While the stationery industry’s growth potential is declining due to a shrinking school-age population and digitalization, K-beauty continues to grow worldwide.

In fact, Korean cosmetics exports hit an all-time high last year. Exports reached $11.4 billion, the largest ever. Demand for K-beauty is surging, especially in the US, Japan, and Southeast Asia, driving growth for cosmetics ODM companies such as Kolmar Korea and Cosmax.

Monami’s strategy in this market is to target niche segments rather than directly compete with large-scale ODM companies. CEO Park explained, "While large ODM companies focus on mass production, our strengths lie in producing small batches of various products and responding quickly to development needs."

On the 24th, eyebrow products are being manufactured at the Monami Cosmetic factory located in Techno Valley, Cheoin-gu, Yongin-si, Gyeonggi-do. Photo by Kwon Jaehee

In particular, Monami emphasizes its injection molding technology, honed in the stationery business, as a key differentiator. The company plans to expand its turnkey ODM business, developing and producing not only the cosmetic contents but also the containers in-house. A notable case is Etude’s “Triangle Glow Tint,” for which Monami handled both container design and production. According to the company, about 1.8 million units were supplied.

The company is also ramping up efforts to enter overseas markets. Currently, sales are split 60% domestic and 40% overseas. Monami is securing clients mainly in the US and Southeast Asia, and recently participated in the European beauty exhibition “MakeUp in Paris” to explore collaboration opportunities with global brands.

Nevertheless, significant challenges remain. The factory's operating rate is still low compared to its production capacity, and profitability has yet to be secured. As the company continues to invest in the factory and research and development, it is difficult to expect a rapid improvement in performance.

This is especially burdensome under the newly established third-generation management system, which began in earnest this year. At its regular shareholders’ meeting in March, Monami completed a generational shift by appointing Song Hayoon as Vice Chairman and CEO, while Honorary Chairman Song Hakyoung stepped down. The new management must now prove its ability to find new growth engines beyond the stagnant stationery business.

The cosmetics production lines now filling the Yongin factory are drawing attention as the market wonders whether Korea’s “national ballpoint pen company” can achieve a second growth legend. CEO Park stated, "As a latecomer, we have invested heavily in research and development (R&D) relative to our sales scale, and our production facilities are on par with the top two companies in the industry. Although losses persist due to these investments, our growth foundation has already been established and we are fully prepared for a major leap forward."

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