K-Beauty Orders Surge... Cosmetics ODMs Scale Up Production Facilities

Cosmax, Korea Kolmar, Cosmecca Korea
Race to Secure Cosmetics Production Capacity
Growth of Indie Brands Drives ODM Order Expansion

Amid a global K-Beauty boom driving a surge in cosmetics orders, South Korean original development manufacturing (ODM) companies are expanding their production facilities in unison. Cosmecca Korea is investing a total of KRW 200 billion in Ochang, Cheongju; Korea Kolmar is enlarging its Sejong manufacturing base; and Cosmax has begun expanding its Pyeongtaek plant. As exports of K-Beauty products led by small and indie brands accelerate, a full-scale race is underway among ODM companies to secure production capacity and handle the influx of orders.

According to the Financial Supervisory Service’s electronic disclosure system and the cosmetics industry on September 14, the three major domestic ODM players—Cosmax, Korea Kolmar, and Cosmecca Korea—have recently announced plans to expand their domestic production facilities.

Cosmecca Korea, the third-largest ODM company, is making the largest investment. On September 9, Cosmecca Korea disclosed a plan to invest KRW 136 billion in new production facilities to respond to heightened cosmetics demand. This follows their June decision to acquire land and buildings at the Ochang factory in Cheongju for KRW 64 billion. With the additional KRW 136 billion allocated for production equipment, total investment in the Ochang production base reaches KRW 200 billion.

This amount exceeds Cosmecca Korea’s current production facility scale. As of the end of June this year, the book value of Cosmecca Korea’s production facilities was KRW 189.3 billion—meaning the investment in the Ochang base surpasses the entire existing book value of their production facilities.

Korea Kolmar is also accelerating the expansion of its domestic production capacity. After withdrawing from its Beijing plant in China, Korea Kolmar is relocating production functions to Korea and expanding its Sejong facility. In March, the company signed an investment agreement with the city of Sejong to build a basic cosmetics production facility on a 9,851-square-meter site in the Jeonui Industrial Complex by 2028. At the time, the investment was announced as KRW 173.3 billion.

Korea Kolmar is securing new land adjacent to the current Sejong plant and proceeding with the factory’s expansion. The company’s reshoring efforts by relocating its production base from China to Korea this year also earned it formal recognition as a reshoring company. As 'Made in Korea' cosmetics gain preference in the global market, Korea Kolmar is expanding domestic capacity to meet demand.

Cosmax is likewise expanding its Pyeongtaek production base. In May, Cosmax announced an additional investment of KRW 60.5 billion in its production facilities within the Goreum Industrial Complex in Pyeongtaek, Gyeonggi Province—equivalent to 9.9% of its equity capital. The company plans to increase production capacity by installing additional skincare production lines in unused areas of the existing Pyeongtaek Plant 1. Expansions are also underway overseas: Cosmax will complete a new 73,000-square-meter building in Shanghai’s Xinzhuang Industrial Park in the second half of this year, raising its annual production capacity in China to 1.6 billion units. The new plant in Thailand is scheduled to begin operation later this year, while the new plant in Indonesia is targeting a launch in the second quarter of next year. Cosmax’s current annual global production capacity stands at approximately 3.5 billion units, with the company aiming to expand this to 4 billion units.

The backdrop for this expansion among cosmetics ODM companies is the sharply increasing demand for K-Beauty. According to the Ministry of Food and Drug Safety, South Korea’s cosmetics exports in the first half of this year reached USD 7 billion, a 27.3% increase year-on-year—a record half-year figure. After a record annual export amount of USD 11.4 billion last year, exports this year surpassed 60% of that total within just six months.

The export market is also diversifying. In the first half of this year, exports to the United States reached USD 1.45 billion, making it the largest export destination, followed by China at USD 1.01 billion and Japan at USD 580 million. While K-Beauty exports previously relied heavily on China, demand has expanded to the United States, Japan, and Europe, prompting ODM firms to address the broader global demand.

In fact, performance at the three leading ODM companies is also rising sharply. In the second quarter of this year, Korea Kolmar posted sales of KRW 861.3 billion and operating profit of KRW 110.3 billion, up by 17.8% and 50.2%, respectively, compared to the same period last year. During the same period, Cosmax recorded its highest-ever quarterly results with sales of KRW 794.9 billion and operating profit of KRW 73.7 billion, increases of 27% and 21%, respectively. Cosmecca Korea also saw a rise in second-quarter sales and operating profit to KRW 226.1 billion and KRW 32.1 billion, up by 39.8% and 39.3%, respectively.

An industry official stated, “The series of facility expansions by ODM companies is not only a result of their current strong performance, but also a move to proactively secure production capacity in anticipation of future increases in K-Beauty orders,” adding, “With K-Beauty beginning to scale up in the global market, production capacity investments mindful of future demand will likely continue for the time being.”

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