Kumho Petrochemical has effectively concluded a management dispute with former executive Park Cheol-wan, marking the beginning of a 'third-generation management era.' However, challenges remain in strengthening core business competitiveness and securing future growth opportunities.
According to industry sources on September 14, the friendly stake held by Park Cheol-wan's side, the nephew of Kumho Petrochemical Group Chairman Park Chan-goo, has diminished, leading to a lull in the management dispute that began in 2021.
Park Cheol-wan's sisters, Park Eun-hyung, Park Eun-kyung, and Park Eun-hye, sold a total of 171,783 common shares of Kumho Petrochemical last month. The three sisters had received a total of 457,200 shares from Park Cheol-wan in 2021, which were classified as friendly shares. With this recent sale, approximately 47% of the gifted shares have entered the market.
In contrast, the influence of Chairman Park Chan-goo's family is strengthening. Chairman Park holds 7.24% of the shares, while his eldest son, CEO Park Jun-kyung, owns 7.75%. His eldest daughter, Vice President Park Joo-hyung, is also steadily increasing her stake through market purchases.
Additionally, Park Cheol-wan did not present any separate shareholder proposals at this year's regular shareholders' meeting, similar to last year, indicating a shift in the balance of power toward Chairman Park's family.
With the management dispute easing, Kumho Petrochemical is now focused on solidifying third-generation management and ensuring growth. The most urgent task is to enhance core business competitiveness, as the domestic petrochemical industry continues to face prolonged challenges due to oversupply from China and weak global demand.
Kumho Petrochemical reported an operating profit of 398.4 billion won in the first half of this year, a 114.4% increase compared to the same period last year. The improvement in second-quarter performance was influenced by external factors, including rising product prices due to supply disruptions from the Middle East. Securing a stable profit structure beyond temporary market improvements is crucial.
The company is seeking breakthroughs by increasing the proportion of high-value-added products. For instance, it is expanding production capacity for solution styrene-butadiene rubber (SSBR), used in high-performance tires. The additional capacity of 35,000 tons per year began commercial operation this year. The strategy also includes increasing the share of high-value products in existing core products like NB latex to move away from price competition based on generic products.
Securing future growth opportunities beyond the existing petrochemical business is another challenge. While the company is developing advanced materials such as carbon nanotubes (CNT) and expanding into battery materials, it has yet to achieve significant results.
Finding a balance between shareholder returns and stabilizing governance is also a task. As the company continues to buy back shares, Park Cheol-wan's ownership percentage naturally increases, which could heighten management pressure despite the existing active shareholder return policy.
An industry insider stated, "While it is premature to conclude that the management dispute is entirely over, the likelihood of a repeat of past shareholder confrontations has significantly decreased. Moving forward, strengthening core business competitiveness and securing growth drivers will be essential."
* This article has been translated by AI.
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