Dongwon Group, which has expanded its business from seafood and food to packaging and logistics, is venturing into the K-beauty market by acquiring the first-generation cosmetics brand Chunzon. There is growing interest in whether Dongwon can leverage Chunzon's research and development capabilities in skincare and production base to cultivate cosmetics as a new growth engine.
According to industry sources, Dongwon Home Food, a subsidiary of Dongwon Group focused on food distribution and processed foods, was selected as the preferred bidder for Chunzon during the sale process managed by the Seoul Bankruptcy Court on September 22. If no other candidates present better terms in the public bidding, the acquisition will be finalized pending court approval. The transaction amount is reported to be in the hundreds of millions of won.
The reason Dongwon is turning its attention to the cosmetics business is to secure new growth drivers and achieve high business efficiency. Starting a new cosmetics venture from scratch would require significant time and financial investment. In contrast, Chunzon already possesses over 40 years of accumulated R&D capabilities in skincare, an independent production infrastructure, and brand recognition represented by its 'Control Cream' and the green frog character.
Notably, Dongwon Group has been preparing to enter the beauty and bio sectors by hiring Nam Taek-jong, a former pharmacist and CEO of RF Bio, as the executive in charge of management strategy in 2023. There is also potential for synergy with the group's packaging (Dongwon Systems) and logistics (Dongwon Logistics) infrastructure.
The push for Chunzon's acquisition has drawn attention to Dongwon's past successful mergers and acquisitions (M&A). In 2008, Dongwon acquired Starkist, the largest tuna brand in the U.S., which was in the red at the time, and grew it into a strong overseas business. Chairman Kim Nam-jung has also expanded the company's business scope by acquiring companies like Geumcheon and Dongbu Express during his tenure as vice chairman. If the Chunzon acquisition is successful, it will mark the first M&A since he took office as chairman in March 2024.
However, normalizing Chunzon's performance remains a challenge. Once the third-largest cosmetics company in South Korea in the 1990s, Chunzon expanded into overseas markets but has faced declining brand competitiveness, reckless business expansion, and management disputes, leading to five consecutive years of losses and ultimately filing for rehabilitation in November of last year.
A Dongwon Group official confirmed, "It is true that we participated in the Chunzon acquisition process," but added, "As this is an ongoing matter, nothing has been finalized yet."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.