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Photo courtesy of Hanwha Solutions |
[Alpha Biz= Paul Lee] Hanwha Solutions has begun a major restructuring of its business portfolio, withdrawing from a planned new investment and deciding to divest its stake in a U.S.-based investment company. The move is seen as an effort to improve financial stability by removing risk factors associated with new business ventures amid a challenging market environment.
On the 24th, Hanwha Solutions announced that it would cancel its planned investment in a high-purity cresol production facility. The company explained that the project had lost economic viability due to longer-than-expected development timelines, increased capital requirements, and rising global supply from China and India, which has pushed down cresol prices since the project was first reviewed.
High-purity cresol is a key raw material used in healthcare products, plastic additives, and synthetic fragrances. Hanwha Solutions had positioned it as a high value-added growth business and began investing in 2021, with plans to complete facilities by 2023. However, delays in mass-production readiness hindered progress. The company had planned to invest a total of KRW 223 billion by the end of this year and is now exploring ways to minimize losses.
Hanwha Solutions has faced a difficult operating environment, alternating between quarterly profits and losses. Its core petrochemical business continues to suffer from China-driven oversupply, while the renewable energy division—including solar—has been hit by U.S. trade policies. Although U.S. restrictions on Chinese solar imports are beneficial in theory, stricter customs procedures have slowed shipments, causing third-quarter sales to decline about 10% from the previous quarter. A return to losses is anticipated in Q4.
Alongside the investment withdrawal, Hanwha Solutions will also sell its stake in Hanwha Futureproof, a U.S.-based group investment company. The total disposal amount is KRW 1.1407 trillion, of which KRW 285.3 billion will be reinvested, leaving approximately KRW 855.4 billion in net cash inflows. While the company has not yet specified how the funds will be used, they are expected to support balance sheet strengthening and overall financial improvement.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
