Hansol Paper CEO Discusses Future Investment Ideas

 

According to an interview this past week by Pulse (Seoul, South Korea) with CEO Lang Sang-hun (pictured at right), South Korean leading paper manufacturer Hansol Paper will speed up a deleveraging effort to improve a financial state that includes crucial rights offerings to be able to afford to venture into new areas for growth. 

Debts shot up as the company shifted into a holding structure, said Lee Sang-hun. The entire proceeds raised from new stock issue will be used to pay off debt to reduce the debt-to-asset ratio to below 200% from current 296%, he said. 

The paper company is planning to bolster capital by issuing rights worth 70.4 billion won ($60 million) to existing shareholders as it aims to become lighter to accelerate investment in new areas, he said. 

One area that leadership of the company was reported to be eager to invest in is thermal paper. Thermal paper, commonly coated with a chemical containing BPA (though alternatives are expected to soon hit the market), changes color when exposed to heat and is used to manufacture receipts given out in department stores, supermarkets, and convenience stores. The company is the country’s largest supplier of such paper, and this is considering it only began production relatively recently, in May of 2013. It is now the world’s third largest thermal paper manufacturer with a capacity of 160,000 tpy. The company, proud of these recent thermal production numbers, now seems to feel comfortable expanding in this sector as well.

The company purchased companies and retailers in the field to achieve economies of scale and is hoping to buy more to become top in thermal paper sector, CEO San-hun pointed out, according to the report. 

Hansol is especially excited about a new type of paper it has recently developed production for. Aramid paper is insulating sheets used in transformers, motors, and generators. The paper is high-performance and high-value paper. The company claimed it is 50 times more expensive when sold than printing and writing paper. 

"The paper manufacturing business could turn into the advanced material industry creating high value," added the CEO, referring to the new company developments. 

He concluded by explaining how the low oil price could serve as a positive factor while pulp price bottoming out would be a burden on the company. He also promised to keep up a friendly shareholders’ policy.