SEOUL, KOREA - Korea's major ready-mixed concrete makers are looking to find new growth engines. The big-three firms in the industry will fight off in the latter half of the year surrounding Tongyang Cement that will be put on the market soon.
According to industry sources on August 17, all the top-three remicon companies including Eugene Group, Sampyo Group, and Aju Corp. are showing keen interest in acquiring Tongyang Cement. That's because a ready-mixed-concrete firm taking over a cement maker can create sizable synergy effects through vertical integration. Analysts estimate the value of Tongyang Cement at 800 billion won to 1 trillion won.
According to the Korea Ready-mixed Concrete Industry Association, the market shares in the Seoul metropolitan area by the three firms were 15.2 percent for Eugene, 14.7 percent for Sampyo, and 8.5 percent for Aju. The volume of shipments last year by Tongyang Cement was 5.63 million tons, with a market share of 12.5 percent. The company was ranked No. 3 in the cement industry.
Of the three, Eugene Group is most aggressive in acquiring Tongyang Cement, as it is flush with cash after selling off Hi-Mart two years ago. Sampyo Group, meanwhile, has submitted a letter of intent to take over Tongyang Pile, a construction material subsidiary of Tongyang Cement in May. Aju Corp. has involved in a deal to take over Taihan Electric Wire. Once it completes the sell-off of Aju Capital, a financial service unit, it is expected to accelerate its pace of acquisition, including Hanil Cement.
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