As C&C International, a specialized ODM (Original Design Manufacturing) corporation, is being acquired by Assent Equity Partners, one-third of the funds raised through the capital increase will be invested in the construction of a new factory. The plan is to expand production capacity to respond to the rapidly growing North American market and the recently increased orders from the Chinese market.
According to the cosmetics industry on the 26th, C&C International has resolved to issue 3,615,960 common shares at 40,100 won per share to Assent Equity Partners in a private placement of new shares. The total amount is 145 billion won.
Additionally, Assent Equity Partners plans to establish a special purpose corporation (SPC) with Shinsegae Group and others to acquire the existing major shareholder's (CEO Bae Eun-cheol and others) 20% stake for 140 billion won. After the capital increase and equity purchase are completed, Assent Equity Partners will secure more than 40% equity, becoming the largest shareholder.
C&C International currently owns its own factories in Hwaseong (headquarters, Purple County) and Yongin (Green County), and has a leased factory in Dongtan. Overseas, it has two factories in Shanghai, China, with an annual production capacity of 298 million units in South Korea and 55 million units in China as of the end of last year. C&C International plans to use about one-third of the funds raised from this capital increase, amounting to 45 billion won, for the establishment of a new factory in Cheongju.
The new factory will be built on a 63,894 square meter (approximately 19,300 pyeong) site within the Cheongju Central Valley General Industrial Complex. This is more than six times larger than the combined area of the existing Hwaseong and Yongin factories. The company's production capacity is expected to be significantly expanded. Previously, the company secured this site by investing 27.05 billion won in 2023 and carried out land development until the end of last year. It plans to commence full construction this year.
C&C International recorded sales of 66 billion won and an operating profit of 5.6 billion won in the first quarter of this year. This represents a decrease of 8.6% and 44.2%, respectively, compared to the same period last year. Since the second half of last year, order volumes from major domestic customers have decreased, and fixed costs have risen due to the operation of leased factories. Sales in South Korea in the first quarter were 34.9 billion won, a decrease of 23.4% compared to the same period last year.
Despite this, C&C International is securing large-scale factory operations to respond to overseas demands. ODMs like C&C International are responsible for the entire process from product planning, development, and design to production, receiving product ideas and concepts from client companies. Recently, domestic and foreign client companies have been expanding into North America and China, leading to an increase in related orders, and there is a growing trend of direct requests from local brands.
C&C International's overseas performance shows a clear improving trend. In the first quarter of this year, the company generated sales of 20.2 billion won in North America, which is about a 37% increase compared to the same period last year (14.7 billion won).
Industry experts predict that C&C International may begin to secure direct local clients by investing in equity in U.S. indie beauty brands. In fact, C&C International stated that it will use about 100 billion won of the funds from the capital increase, excluding equipment investment costs, for acquiring securities from other companies.
Since the end of last year, there has also been a surge in orders from major clients in China. A new Chinese client placed an initial order of 750,000 units in the fourth quarter of last year and made additional orders of 4.3 million units and 6.62 million units in March.
Thanks to this expanding sales trend, the company recorded a revenue of 4.4 billion won from its Chinese subsidiary in the first quarter, which is about a 29% increase compared to the same period last year, and it has returned to profitability. C&C International stated, "The axis of growth is shifting from domestic to overseas."
Park Eun-jeong, an analyst at Hana Securities, noted, "C&C International is gradually increasing its projects with global color brands and indie brands," and added, "With the increased new orders, there is a trend of increasing revenue and profitability each quarter this year."
Lee Ga-young, an analyst at Samsung Securities, stated, "Assent Equity Partners, which is acquiring C&C International, has a strong investment track record in global consumer goods corporations. There will likely be positive synergies with the overseas strategy."