Enchem Accelerates Profitability with Cost, Organizational, and Asset Optimization

Reassessing Cost Structures in Production, Procurement, and Logistics

Enhancing Efficiency in Global Operations

Improving Utilization of Underused Assets

Clearer Responses to Year-End Convertible Bond Issues

On June 26, Enchem, a global company specializing in electrolytes, announced that it is undertaking a comprehensive review of its cost structure, organizational operations, and asset utilization to strengthen its profit-and-loss-focused management system.

Enchem is shifting its management focus from expanding business scale and its global production base to maximizing the utilization of its current management resources and optimizing its cost structure. The company has identified the following as its main priorities: cost and operational expense optimization, organizational restructuring, and improving asset utilization. Rather than focusing on short-term cost reductions, Enchem is aiming to establish a sustainable profit-and-loss foundation by improving the operational structures of each business and production site.

Exterior view of Enchem headquarters in Cheonan. Enchem

First, the company is conducting a comprehensive review of key cost items affecting profitability, such as production, procurement, logistics, and selling and administrative expenses. Based on the operational status of each production site and customer demand, Enchem plans to adjust raw material procurement methods and logistics systems, while reducing duplicate costs and inefficiencies that arise during business operations.

The company has also established the principle of improving the cost structure while maintaining production stability and product quality. While continuing to invest in quality competitiveness, customer response, and research and development capabilities, Enchem will selectively adjust operational costs that can be improved in the process.

The organization will be restructured to enhance business execution and accelerate decision-making. Enchem plans to reorganize the roles and work procedures of both its domestic and overseas business organizations and integrate overlapping or similar functions to establish a system that enables more efficient management of its global production sites.

This organizational restructuring will focus on reallocating personnel and resources based on business priorities rather than uniform workforce reductions. The company will maintain its expertise in core technology, production, quality, and customer response, while enhancing the operational efficiency of its support organizations. The specific scope and timeline of the restructuring will be determined gradually, according to the operational status of each business site and subsidiary.

Asset efficiency will also be improved based on each asset’s contribution to the business and its utilization rate. To focus more on its ongoing businesses, Enchem has decided to sell its 49% stake in SHINGHWA AMPEREX CORPORATION for approximately 49 billion won. Starting with this equity sale, the company will re-examine the business relevance and profit contribution of its assets and pursue asset-specific efficiency measures for non-core or underutilized assets.

The details regarding the disposal, scale, and timing of individual assets have not yet been finalized. If specific decisions are made in the future and they are subject to disclosure, the company plans to inform the market in accordance with relevant procedures.

In addition, Enchem is comprehensively reviewing financial matters that have attracted market attention, including convertible bonds, by considering maturity structure, contract terms, available resources, and market conditions.

With this management efficiency initiative, Enchem is prioritizing the establishment of an operational foundation that enhances cost control, asset utilization, and organizational productivity, rather than simply aiming for short-term performance improvement. The company plans to transition to a system that manages profit and loss, cash flow, and capital efficiency in tandem, rather than relying solely on external expansion, in order to improve responsiveness to market fluctuations.

Jungkang Oh, CEO of Enchem, stated, "It is now crucial to link the global production base and business capabilities we have expanded so far to profitability and cash flow. We will refine cost structures in production, procurement, and logistics, and enhance the utilization of our organization and assets to build a management system that manages not only external growth but also profit-and-loss and capital efficiency." He added, "We are closely monitoring contract terms and market conditions for financial issues and responding responsibly. We will actively communicate specific decisions and progress to the market as appropriate, in accordance with relevant procedures."

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