Source: Internet, Reuters, Khaleejtimes.
South Korea's three largest contract manufacturers - Cosmax, Korea Kolmar and Cosmecca - have all been approached by foreign investors about buying a minority stake in recent years, three people with direct knowledge of the situations told Reuters.
Though largely staying in the background with little public recognition themselves, contract manufacturers stand to benefit as Korean brands they work for rapidly grow in China's $53.5 billion cosmetics market.
South Korea's three largest contract manufacturers - Cosmax, Korea Kolmar and Cosmecca - have all been approached by foreign investors about buying a minority stake in recent years, three people with direct knowledge of the situations told Reuters.
Though largely staying in the background with little public recognition themselves, contract manufacturers stand to benefit as Korean brands they work for rapidly grow in China's $53.5 billion cosmetics market.
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The sources asked for anonymity and declined to elaborate further citing confidentiality of the approaches. One of the sources said one of the manufacturers had rejected a 2016 offer from an overseas cosmetics company for a minority stake, partly due to concerns that such an alliance could upset its broader customer base.
China's own fast-growing cosmetics brands, albeit still small, are also driving the revenue growth of South Korean manufacturers, although margins on these contracts can be low, company officials say.
The stock market performance of the three has been mixed, though they have all outperformed the main benchmark in South Korea.
Shares of global No.1 Cosmax, has gained 34 per cent year to date, far outpacing a 8 per cent drop in the wider South Korean market. Cosmecca shares rose 8 percent and second-ranked Korea Kolmar fell 3 per cent in the same period. All three have, though, outperformed the 21 per cent decline in shares of Amorepacific Group, South Korea's largest cosmetics powerhouse.
Amorepacific, which uses both in-house and contract manufacturing, reported revenue fell 10 percent and operating profit slumped by nearly 30 per cent in the first three months of 2018. Its brands include the top-end Sulwhasoo, mass market Innisfree, and young makeup offering Etude House.
Even as all the top three contract firms, which are also known as original equipment manufacturers (OEMs), posted revenue growth in the same period.
The sources asked for anonymity and declined to elaborate further citing confidentiality of the approaches. One of the sources said one of the manufacturers had rejected a 2016 offer from an overseas cosmetics company for a minority stake, partly due to concerns that such an alliance could upset its broader customer base.
China's own fast-growing cosmetics brands, albeit still small, are also driving the revenue growth of South Korean manufacturers, although margins on these contracts can be low, company officials say.
The stock market performance of the three has been mixed, though they have all outperformed the main benchmark in South Korea.
Shares of global No.1 Cosmax, has gained 34 per cent year to date, far outpacing a 8 per cent drop in the wider South Korean market. Cosmecca shares rose 8 percent and second-ranked Korea Kolmar fell 3 per cent in the same period. All three have, though, outperformed the 21 per cent decline in shares of Amorepacific Group, South Korea's largest cosmetics powerhouse.
Amorepacific, which uses both in-house and contract manufacturing, reported revenue fell 10 percent and operating profit slumped by nearly 30 per cent in the first three months of 2018. Its brands include the top-end Sulwhasoo, mass market Innisfree, and young makeup offering Etude House.
Even as all the top three contract firms, which are also known as original equipment manufacturers (OEMs), posted revenue growth in the same period.
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